By Mary O’KEEFE
Assemblymember Mike Gatto was joined by small business owners, consumer attorneys and representatives of Assemblymember Jimmy Gomez at The Coffee Table Bistro in Eagle Rock to celebrate the signing of AB 227.
The bill reforms Proposition 65 to protect small businesses from meritless lawsuits by providing a “fix-it ticket” for violations based on the most common, everyday substances covered under Prop. 65. These include alcoholic beverages and those substances that naturally occur when grilling food. The bill is significant because its catalyst was a discussion with members of Gatto’s Small Business Advisory Commission.
“I had gotten a letter from an attorney threatening to sue me. He claimed he represented a person who had been coming into my [restaurant] every day for the past eight years,” said Brett Schoenhals, owner of The Coffee Table Bistro and member of the Commission.
Schoenhals did not recognize the person who had brought the lawsuit and although he had warning signs posted he had heard of other businesses dealing with these types of lawsuits. The plantiff does not have to show actual harm only that the signs were not properly posted. After looking into the lawsuit, he found that some businesses would just settle with the lawyer rather than face a $2,500 per incident penalty.
“[I also found] there are only two lawyers in the whole state that [file these types of suits],” Schoenhals added. “They had sent out about 76 letters to businesses of different sizes.”
After discovering this information, Schoenhals began contacting officials.
“I went to the city [of Los Angeles] and they literally laughed at me. The [L.A.] County did nothing,” he said. “I spoke with my landlord and told him if this lawsuit went forward, I would have to close.”
Whether he settled or fought the lawsuit would be a financial hardship.
Schoenhals then went to Gatto’s office and joined the Commission. He explained the problem and Gatto listened.
“He was the only one who would listen to me. He listened and took action and, especially for the [state] legislation, it was extremely swift,” Schoenhals said.
From discussion with the Small Business Commission to the bill’s passage took about a year.
“We were just as shocked as [Schoenhals] at the quick passage of the bill,” Gatto said. “I made this my number one priority this year.”
The bill gives business owners 14 days to comply with a complaint instead of immediately issuing a fine. The complaints, Schoenhals said, could vary from not having enough signs to having the wrong size signs.
“I heard of one business that was sued because they were [supposed] to have a 10” by 10” [warning] sign, but had an 8” by 11” instead,” he said.
“I could hear the frustration in [Schoenhals] voice,” Gatto said. “This is definitely why we created the Commission.”