Assembly Bill 1776 would broaden the state’s antitrust framework, giving individuals and businesses that claim they were harmed by a single company’s efforts to squeeze out competition the ability to sue in state court. Under current California law, these kinds of cases typically require evidence that two or more parties conspired to stifle competition. Federal law already allows enforcement against a single dominant company, but supporters of what’s being called the California COMPETE Act argue that federal courts have chipped away at antitrust protections so much that the state needs its own legal standard.

The fight has created an unusual alignment of interests, pitting labor unions and trial attorneys against California’s influential business and technology lobbies. Combined, groups on both sides of the debate have poured at least $106 million into legislative campaigns since 2000, according to CalMatters’ Digital Democracy database.

Backers of the bill say it would give shoppers a legal tool to help keep independent grocery stores and pharmacies from being squeezed out, prevent single companies from dominating farm and restaurant supply chains, and expand health care choices for patients.

Assemblymember Cecilia Aguiar-Curry, the Democratic majority leader who represents the Davis area and is carrying the bill, told the Senate Judiciary Committee last month that more than 75% of American industries have undergone significant consolidation since the late 1990s.

“When companies gain that much power and abuse it, it translates into higher prices, fewer choices, fewer opportunities for entrepreneurs to start small businesses, and lower wages for working families,” Aguiar-Curry told the committee.

Business groups counter that the bill would open a new avenue for unscrupulous law firms to pressure companies into costly settlements. For years, employers have complained that California’s legal landscape already invites activists and plaintiffs’ attorneys to target businesses with demand letters and lawsuits over issues such as disability access compliance, product warning labels, wage and hour claims, and consumer privacy violations.

The California Chamber of Commerce was concerned enough about the bill that its lobbyists put up billboards near the state Capitol earlier this year calling out Aguiar-Curry by name.

“Cecilia, prices are high enough,” one billboard read. “Don’t make life more expensive for California consumers.” Chamber spokesperson John Myers declined to comment further on the billboard campaign.

Moderate Democrats remain wary

If the chamber’s goal was to pressure lawmakers into killing the bill, the tactic may have backfired. The unusually public attack on a well-regarded, senior Democrat appears to have generated sympathy and support for the legislation, even as several moderate Democrats continue to worry that it could make California a harder place to do business.

At least one legal expert says those concerns have merit. Babette Boliek, a law professor at Pepperdine University and former chief economist at the Federal Communications Commission, argues the bill’s language is so broad that it “would invite judges to pick winners and losers based on subjective sympathies rather than measurable harm.” She compared it to enforcing “a speed limit nobody knows exists.”

Aguiar-Curry’s office has responded to some of the criticism. After early pushback, she added a carve-out meant to shield small, independent California businesses — those with no more than 100 employees and average annual gross revenue under $10 million over the previous three years — from being sued under the new law.

Ben Golombek, executive vice president of the California Chamber of Commerce, said thousands of California companies would still be exposed to expensive litigation, including lawsuits from their own competitors.

“This unprecedented, massive legal liability for businesses of all sizes — small, medium and large — is why we oppose this bill so strongly,” he said.

Mark Ramos, president of the Western States Council of the United Food and Commercial Workers union, said the bill would help ensure that industry consolidation doesn’t drive down wages or push up prices for workers. As grocery chains continue to merge, he said, it’s become harder for union members to negotiate the kind of wages that once allowed workers like him to afford housing.

“With that consolidation has come the bigger challenge of not being able to negotiate a contract that allows our members to thrive in their local economy, because these retailers no longer have to compete with each other,” Ramos said.

Some Democrats remain hesitant, particularly state Sen. Tom Umberg, the Democratic chair of the Senate Judiciary Committee. Historically, Umberg has voted alongside Ramos’ union about 93% of the time, according to Digital Democracy records.

A key sticking point for Umberg is whether private citizens and businesses should be allowed to file lawsuits under what’s known as a “private right of action.” He told the committee he currently wants that authority limited to local district attorneys and the California attorney general.

“We want to make sure we’re not chilling competition through the threat of lawsuits,” Umberg said during the hearing.

Aguiar-Curry said she’s willing to make most of the changes Umberg has requested, but has not committed to restricting enforcement solely to prosecutors. She said she would keep working to make it harder to file frivolous lawsuits in the next version of the bill.

Will the measure actually deter bad behavior?

The bill cleared committee with Republicans casting the only “no” votes, but Umberg abstained when his turn came — a move that functions as a “no” vote without officially opposing the bill. Fifteen other Democrats also declined to vote when the measure narrowly passed the Assembly floor.

Abstaining is a familiar strategy among California lawmakers looking to signal discomfort with a bill without angering powerful interest groups or colleagues by voting no outright.

The COMPETE Act will go before the Senate Appropriations Committee again when lawmakers return from summer recess in early August.

Supporters are hoping the final version of the bill preserves Californians’ ability to sue companies over anti-competitive conduct. Lee Hepner, senior legal counsel at the American Economic Liberties Project, an advocacy group focused on fighting monopolistic practices, said it’s critical that ordinary Californians retain the right to bring these legal challenges themselves.

Without that option, he said, large corporations will simply lean on their financial resources and political influence to pressure regulators and lawmakers into looking the other way.

“The private right of action is a critical check against the politicization of antitrust enforcement, which threatens the entire project of policing markets to ensure fairness,” Hepner said.

Original source: CalMatters

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The bill, authored by Assemblymember Cecilia Aguiar-Curry, a Davis Democrat, would make it easier to sue companies in state court over alleged anti-competitive behavior. Under the measure, individuals and businesses who believe they’ve been harmed by a company’s efforts to squash competition could bring their own legal action, rather than relying solely on state or federal regulators to step in. Smaller firms — those with 100 or fewer employees and average annual gross receipts of at least $10 million over the past three years — would be shielded from the law.

Supporters argue the change is overdue. Aguiar-Curry and other backers point to federal antitrust enforcement, which they say has grown increasingly passive even as entire sectors of the American economy have consolidated into the hands of a few dominant players. More than three-quarters of U.S. industries have seen this kind of consolidation since the late 1990s, according to the assemblymember.

“When companies gain that much power and abuse it, that means higher prices, less choice, fewer opportunities for job creators to start small businesses and suppressed wages for working families,” Aguiar-Curry told colleagues during a June hearing.

But the proposal has run into resistance from business groups, who warn it would expose companies to a wave of costly litigation and give what they call predatory law firms a new avenue to pressure businesses into settlements. Several moderate Democrats have echoed those concerns, saying the bill could make California an even tougher place to operate a business.

“We want to make sure that we are not stifling competition by virtue of the threat of lawsuits,” said state Sen. Tom Umberg, a Santa Ana Democrat.

Umberg was among lawmakers who declined to cast a vote when the bill came before the Senate Judiciary Committee in June. He joined 16 Assembly Democrats who similarly withheld support during an earlier floor vote in May. The measure now heads to the Senate Appropriations Committee, where its fate remains uncertain as lawmakers continue to weigh consumer protection against the concerns of the business community.

For Inland Empire and Southern California business owners watching the debate, the outcome could carry real consequences — either a stronger avenue for challenging monopolistic practices that squeeze out competitors, or a new source of legal exposure that adds to the cost of doing business in the state.

In other Sacramento news, the University of California is pushing back on reports suggesting it has abandoned plans to reconsider the SAT for undergraduate admissions. UC officials say a fresh evaluation of the test’s role remains on the table, even as the original timeline has shifted. The clarification comes amid growing pressure from some faculty members who want the test reinstated, arguing it offers a valuable, consistent benchmark for incoming students — particularly those pursuing degrees in science, technology, engineering and math. The UC Board of Regents eliminated the SAT requirement in 2020 amid concerns it disadvantaged low-income applicants, and only the regents have the authority to bring it back.

Meanwhile, the California Supreme Court is preparing to hear a series of cases challenging the use of undercover jailhouse informants, a controversial law enforcement technique known as a Perkins operation. Critics say the tactic — in which agents posing as fellow inmates, often larger and more experienced than their targets, attempt to elicit confessions — is coercive and falls disproportionately on Black and Latino defendants. A CalMatters investigation found that among cases now before the state’s high court, defendants are split among Hispanic, Black and white individuals, but a broader review of murder cases from 2015 to 2023 found Black defendants were targeted for these stings more than four times as often as white defendants.

Original source: CalMatters

The post California Weighs Giving Consumers More Power to Sue Large Corporations appeared first on The Hemet & San Jacinto Chronicle.

Assembly Bill 1776, known as the COMPETE Act, would broaden California’s antitrust laws to let individuals and businesses take companies to state court if they believe unfair, monopolistic tactics have caused them harm. Currently, such lawsuits generally require proof that two or more companies conspired to squeeze out competitors. Federal law does allow claims against a single company acting alone, but supporters of the bill argue that federal courts have weakened antitrust protections so significantly that California needs its own, stronger version.

The debate has emerged as one of the more heated fights of this legislative session, drawing battle lines between labor unions and trial attorneys on one side and business and technology lobbying groups on the other. Together, these interests have poured more than $106 million into California campaign coffers since 2000, according to CalMatters’ Digital Democracy database.

Backers of the bill say it would give everyday Californians a legal tool to keep neighborhood grocery stores and pharmacies from being squeezed out, prevent single corporations from controlling entire supply chains that farms and restaurants depend on, and preserve patient choice in health care.

Assembly Majority Leader Cecilia Aguiar-Curry, a Davis Democrat who authored the bill, told the Senate Judiciary Committee last month that more than three-quarters of American industries have grown increasingly consolidated since the late 1990s.

“When companies gain that much power and abuse it, that means higher prices, less choice, fewer opportunities for job creators to start small businesses and suppressed wages for working families,” Aguiar-Curry told the panel.

Business advocates counter that the measure would open the door for opportunistic law firms to target companies with costly lawsuits, regardless of merit. They point to California’s history with other consumer-protection statutes — covering disability access, product warning labels, wage claims and privacy — that critics say have spawned a cottage industry of litigation aimed more at settlements than genuine reform.

The California Chamber of Commerce has been especially vocal in its opposition, going so far as to put up billboards near the state Capitol earlier this year calling out Aguiar-Curry by name. One read: “Cecilia, prices are high enough already. Don’t make life more expensive for California consumers.” A Chamber spokesperson declined to comment further on the billboard campaign.

Rather than quiet the bill’s momentum, though, the public pressure campaign appears to have strengthened support among many Democrats, even as some moderates in the party remain uneasy about the potential impact on businesses operating in the state.

Babette Boliek, a law professor at Pepperdine University and former chief economist for the Federal Communications Commission, said those concerns aren’t unfounded. She argues the bill’s language is too vague, potentially giving judges broad discretion to rule based on sympathy rather than clear evidence of harm — comparing it to enforcing “a speed limit that no one knows exists.”

In response to criticism, Aguiar-Curry’s office added a carve-out meant to shield small, independently owned California businesses — those with 100 or fewer employees and average annual gross revenue under $10 million over the past three years.

Still, Cal Chamber Executive Vice President Ben Golombek argues that thousands of businesses of all sizes would remain exposed to expensive litigation, including lawsuits filed by rival companies. “This unprecedented and massive legal liability for businesses of every size — small, medium, and large — that this bill creates is why we’re so opposed to it,” he said.

On the other side, labor leaders say the measure is overdue. Mark Ramos, president of the United Food and Commercial Workers Western States Council, said increasing consolidation among grocery chains has made it harder for workers to negotiate fair wages, since fewer competitors means less pressure on employers to offer better pay. “With that consolidation has come the larger challenge of not being able to negotiate a contract that allows our members to kind of thrive in their local economy because these grocers no longer have to compete against each other,” Ramos said.

Despite the bill’s momentum, some Democrats remain cautious. Sen. Tom Umberg, a Santa Ana Democrat who chairs the Senate Judiciary Committee, has raised concerns about allowing private citizens and businesses — rather than just government prosecutors — to file these lawsuits. He has pushed for enforcement to rest solely with the state attorney general and local district attorneys, at least for now.

“We want to make sure that we are not stifling competition by virtue of the threat of lawsuits,” Umberg told the committee.

Aguiar-Curry has agreed to make several changes Umberg requested but has stopped short of limiting enforcement power to prosecutors alone. She said she would keep refining the bill to make it “harder to bring a meritless suit” before its next hearing.

The bill cleared the Judiciary Committee, with only Republicans voting against it. However, Umberg abstained rather than casting a “no” vote — a move that carries the same practical effect. He was among 16 Democrats who declined to vote when the bill narrowly passed the Assembly, a common maneuver lawmakers use to avoid publicly opposing legislation backed by powerful allies while still signaling discomfort.

The COMPETE Act is next scheduled to be heard by the Senate Appropriations Committee when the Legislature reconvenes from summer recess in early August.

Supporters are hoping the final version of the bill preserves the right of ordinary Californians to sue over anticompetitive conduct. Lee Hepner, senior legal counsel at the American Economic Liberties Project, an advocacy group focused on curbing corporate monopolies, said allowing private lawsuits is essential to keeping large corporations in check.

Without that option, he warned, companies with deep pockets and political influence could pressure regulators and lawmakers into looking the other way. “The private right of action is a critical backstop to the politicization of antitrust enforcement, which threatens the entire project of policing markets for fairness,” Hepner said.

Original source: CalMatters

The post California Democrats Split Over Proposal Making It Easier to Sue Corporations appeared first on The Hemet & San Jacinto Chronicle.