Legislation

ICYMI: Attorney General Bonta in USA Today: Social Media is Addictive by Design. We Must Act to Protect our Kids’ Mental Health.

March 18, 2024
Contact: (916) 210-6000, agpressoffice@doj.ca.gov

California Attorney General Rob Bonta and New York Attorney General Letitia James last week published an op-ed in USA Today, excerpted below, highlighting legislation sponsored by the California Department of Justice.

By Attorney General Rob Bonta and Attorney General Letitia James:

As state attorney generals, we have two primary duties: defending our states’ laws and interests, and protecting the rights and well-being of the people we were elected to serve. When Americans across the country faced urgent and powerful threats to their health, safety and prosperity, attorneys general across the nation have stood together to take them on. Now, as a mental health crisis exacerbated by social media giants seeking to addict and commodify the attention of children grows worse and worse each year, it’s time to take collective action again. 

We will not stand by and watch an arms race among social media mega-corporations over who can best profit from our children’s pain and addiction. That is why we are using every tool at our disposal to fight back against these pernicious practices: from the courthouse to the statehouse.  That is why we are also championing legislation in our respective states to crack down on addictive feeds and safeguard against the collection and sale of children’s personal information.

Curbing the excesses of some of the world’s most powerful and influential companies will not be easy. But the formative mental health of a generation is at stake, and we cannot afford to stand idly by and not respond. We’ve stepped up before as attorneys general to address a rising threat to the health and safety of our constituents. With the support and courage of our colleagues in our states’ legislatures, we know that we will succeed, and that children will finally be protected against the most insidious harms of social media. 

To read the op-ed in its entirety please see here.

To learn more about California’s legislation please see here.

Attorney General Rob Bonta, Senator Limón Unveil Legislation to Protect Consumers Against Medical Debt

March 10, 2024
Contact: (916) 210-6000, agpressoffice@doj.ca.gov

SACRAMENTO – California Attorney General Rob Bonta, Senator Monique Limón (D- Santa Barbara), and a coalition of prominent consumer advocacy organizations today unveiled Senate Bill 1061 (SB 1061), legislation seeking to protect consumers from having their credit ruined by prohibiting medical debt from being reported on credit reports. Credit reports are meant to gauge an individual’s ability to repay future debt. Medical debt is often unforeseen and not a reliable indicator of financial risk, yet it can unfairly prevent consumers from getting loans, renting an apartment, or getting a job.

“California families should not need to suffer from the harmful and unnecessary impacts resulting from having their credit damaged by medical debt. We have a straightforward solution and need to implement it here in California, just as we have seen some of our sister states do successfully,” said Attorney General Rob Bonta. “There is no need for medical debt to appear on credit reports and we can stop the harmful spiral where people have unforeseen, catastrophic medical debt and become unhoused, unemployed, or without a vehicle to get to work. To reduce homelessness, to reduce food insecurity, and to address many of California’s other systemic issues, we must utilize upstream interventions that get to the crux of these problems. This is exactly what SB 1061 does.”

“Today a staggering 1 in 5 Californians has reported having medical debt with a disproportionate impact on women and mothers. This debt negatively impacts Californians credit history making it harder to secure a loan, buy a house, or be approved for a credit card,” said Senator Monique Limón. “Without a robust health care system that covers necessary and often lifesaving medical expenses in a timely, accurate and comprehensive manner, medical debt should not be included on consumer's credit reports.”

“We’ve known for years that medical debt doesn’t predict credit defaults, nor does it accurately predict a person’s desire and willingness to pay off loans,” said Jenn Engstrom, State Director of CALPIRG. “We’re hopeful that the legislation introduced by Senator Limón and sponsored by Attorney General Bonta will help create a fair credit system that doesn’t penalize people for life events they can’t control like getting sick.”

"Frontline nurses know that patients with medical debt, especially low-income Californians, delay or avoid medical care because they worry about the impact on their credit reports," said California Nurses Association President Cathy Kennedy, RN. "SB 1061 will help to ensure patients will get the care they need by removing medical debt from credit reports. Then we will have a fair credit system that will not penalize patients when they get the care they need and deserve." 

“People can’t control when they will get sick or hurt, and they can’t control when billing disputes and insurance problems will cause debts for expensive medical care to end up in collections,” said Chi Chi Wu, senior attorney at the National Consumer Law Center. “This law is necessary to protect consumers from unmanageable and unpredictable medical debts and to address the disparate impact of medical debt on Black households.”

"Getting hit with medical debt isn't like taking out a loan," noted Ted Mermin, director of the California Low-Income Consumer Coalition. "It's not voluntary, it doesn't predict how creditworthy you are, and all too often the amount you're charged is something the healthcare provider basically made up. But there's nothing fictional about the serious negative impact medical debt can have on consumers' credit reports."

"The Consumer Federation of California is pleased to be a co-sponsor of SB 1061 and work with Senator Limón, Attorney General Bonta and all the other fine groups working to enhance consumer protection when it comes to medical debt," said Robert Herrell, Executive Director of the Consumer Federation of California. "Simply put, California is falling behind in consumer protection in this area. States like New York and Colorado are leading the way. Those states have realized that medical debt shouldn't be an anchor dragging consumers down, both personally and via their credit worthiness. California must do better for consumers and this bill is an important step in that direction. This bill will put California back at the front of the line when it comes to consumer protection against medical debt ruining their lives."

"Health care costs are rising, forcing more and more Californians to delay or skip care in fear of getting an expensive medical bill that can lead to debt,” said Katie Van Deynze, policy and legislative advocate for Health Access California, a co-sponsor of the bill. "Black, Latino and low-income Californians disproportionately have medical debt, and counting it against credit exacerbates inequities in health, housing, employment and more. SB 1061 will give all Californians more peace of mind to seek the care they need knowing it will not negatively affect their credit and their future."

The bill sponsored by Attorney General Rob Bonta, the National Consumer Law Center, the CA Nurses Association, Health Access CA, Consumer Federation of CA, CA Low Income Consumer Coalition, Cal-PIRG, and authored by Senator Limón states that:

  • Health care providers should not provide information regarding a patient’s medical debt to a credit reporting agency. 
  • Health care providers should include a provision in any contract entered into with a collection agency that prohibits the reporting of any information regarding a patient’s medical debt to a consumer credit reporting agency.
  • Credit reporting agencies should not accept, store, or disclose any information concerning a medical debt.

Medical debt continues to increase and is a barrier to employment, housing, and the promotion of health care access and equity. The Urban Institute reported 7.8% of California consumers with a credit report had a medical debt listed on it, increasing to 8.5% for Black Californians. People with medical debt are more likely to say debt has caused them to be turned down for a rental or a mortgage than people with student loans or credit card debt, increasing their risk of homelessness or being forced to live in substandard housing. Debt can also create barriers for finding employment as employers often use credit reports as a basis for hiring decisions, which in turn, makes it even more difficult to pay off medical debt. Both Colorado and New York have passed laws that prohibit medical debt from appearing on credit reports. In September 2023, the Consumer Financial Protection Bureau announced a rulemaking process to remove medical bills from consumers' credit reports.

Text for the proposed bill can be found here

In Recognition of National Consumer Protection Week, Attorney General Bonta Highlights Recent DOJ Consumer Protection Action, Urges Consumers to Know Their Rights

March 6, 2024
Contact: (916) 210-6000, agpressoffice@doj.ca.gov

OAKLAND – In recognition of National Consumer Protection Week, California Attorney General Rob Bonta today highlighted ongoing efforts to protect California consumers and urged Californians to report misconduct or violations of state consumer protection laws to the California Department of Justice (DOJ) at oag.ca.gov/report. Complaints submitted by the public provide DOJ with important information about potential misconduct to help determine whether to investigate a business or individual.

“In California, we have strong consumer protection laws and a tremendous team working around the clock to protect Californians online, in their financial lives, in their efforts to find and keep housing and education, and across the marketplace. And we need your help,” said Attorney General Bonta. “This National Consumer Protection week I urge Californians to stand up with me and know their rights as consumers, and to let us know if they see misconduct in the market. Whether protecting data privacy, tenant protections, or stopping egregious bank fees, as the People’s Attorney, I am committed to enforcing consumer protections in the state of California and speaking out for consumer protections nationwide.”

STANDING UP FOR CONSUMER FINANCIAL PROTECTION:

In February, Attorney General Bonta issued letters to banks and credit unions not subject to the Consumer Financial Protection Bureau’s supervision warning that overdraft and returned deposited item fees may violate California’s Unfair Competition Law (UCL) and the federal Consumer Financial Protection Act (CFPA). Some financial institutions charge up to $36 or more for each overdraft. California consumers paid an estimated $200 million in overdraft fees in 2022, with the financial burden disproportionately falling on low-income consumers and consumers of color.

In December 2023, Attorney General Bonta joined a bipartisan multistate coalition of attorneys general in submitting an amicus brief to the U.S. Supreme Court defending states’ rights to enforce state consumer financial protection in Cantero v. Bank of America.

In May 2023, Attorney General Bonta, and a coalition of 24 attorneys general, filed an amicus brief in the U.S. Supreme Court supporting the Consumer Financial Protection Bureau’s (CFPB) contention that the agency’s funding structure is constitutional and arguing that the court should not invalidate the CFPB’s past and ongoing regulatory and enforcement actions. Those regulatory and enforcement actions cover all aspects of consumer financial markets; if allowed to stand, the Fifth Circuit’s decision threatens to upend over a decade of enforcement and regulatory work by the CFPB and would be detrimental to consumers across the country.

HIGHER EDUCATION: 

There is a $1.7 trillion student loan debt crisis in the United States. DOJ is committed to supporting the efforts of the U.S. Department of Education to ease the burden of federal student loans and is committed to protecting California student loan borrowers and those seeking higher education from predatory colleges and lending.  

In February, Attorney General Bonta celebrated the decision by the California Court of Appeal affirming a lower court’s decision which found in the state’s favor in its lawsuit against Ashford University, an online, for-profit college, for violating California’s unfair competition and false advertising laws. In 2017, DOJ filed a lawsuit alleging that Ashford University and Zovio provided false and misleading information to students about career outcomes, cost and financial aid, pace of degree programs, and transfer credits, in order to persuade them to enroll to persuade them to enroll in the school and then used illegal debt collection practices when students struggled to pay their bills. As part of the decision, the court ordered Ashford University and Zovio to pay more than $21 million in penalties.

If you believe you have been the victim of a predatory loan, deceived by a for-profit college, or otherwise taken advantage of, you can file a complaint at oag.ca.gov/report

HOUSING: 

California is facing a housing shortage and affordability crisis of epic proportions. Almost 17 million Californians – 44% of all state residents – live in homes that are rented and over half of California renter households are housing cost-burdened, placing them at increased risk of housing instability and homelessness. Co-authored by Attorney General Bonta during his time as a state assemblymember, the Tenant Protection Act (TPA) limits rent increases and prohibits landlords from evicting tenants without just cause.

In February, Attorney General Bonta announced a settlement with two separate Bakersfield landlords and their property management company, Clemmer & Company, for multiple violations of the TPA and, in the case of the management company and one landlord, for violation of the Fair Employment and Housing Act.

Also in February, Attorney General Bonta issued five housing consumer alerts advising California tenants of their rights and protections under state law, and alerting property managers and landlords of their obligations to tenants. One of the alerts, a Know Your Rights alert that notifies tenants of the TPA’s statewide rent increase cap, is available in 24 languages. The remaining four consumer alerts are available in English, Spanish, Chinese (Simplified), Korean, Tagalog, and Vietnamese. All of the alerts are available here, near the bottom of the page.

In January, Attorney General Bonta announced a settlement with Invitation Homes to resolve allegations that the company violated the TPA and California’s price-gouging law by unlawfully increasing rents on approximately 1,900 households.

In June 2023, Attorney General Bonta announced a settlement against Green Valley Corporation, a San Jose-based housing developer and property manager to resolve allegations that the company violated the TPA by issuing unlawful rent increases to nearly 20 of its employee tenants and serving unlawful eviction notices to six of those employee tenants.

In addition to statewide protections, some cities and counties have additional rental protections, including stricter limits on rent increases than the TPA and additional just cause requirements. Californians should check what protections are in place where they live. For more information and resources, visit the Resources for Tenants tab here.

PROTECTING CHILDREN ONLINE:  

In January, Attorney General Bonta, Assemblymember Buffy Wicks, and Senator Nancy Skinner introduced the California Children’s Data Privacy Act (AB 1949 (Wicks)), and the Protecting Our Kids from Social Media Addiction Act (SB 976 (Skinner)), landmark legislation seeking to protect youth online. These two bills would, respectively, limit the harms associated with social media addiction and provide more robust protections for kids’ data privacy.

In October 2023, Attorney General Bonta co-led a bipartisan coalition of 33 attorneys general in filing a federal lawsuit against Meta Platforms, Inc. and affiliates (Meta), alleging that Meta designed and deployed harmful features that addict children and teens to their mental and physical detriment. Unredacted documents from this lawsuit demonstrate Meta is aware and purposefully utilizing algorithmic content delivery to target and addict children to social media — actions that they know is causing harm. 

DATA PRIVACY:

The California Consumer Privacy Act (CCPA) provides consumers with groundbreaking rights over their personal information, including:

  • Right to Know – Consumers may request that a business tell them what specific personal information they have collected, shared, or sold about them, and why it was collected, shared, or sold.
  • Right to Delete — Consumers may request that a business delete personal information that the business collected from the consumer, subject to some exceptions.
  • Right to Opt-Out — If a business sells their personal information, consumers may request that it stop doing so.
  • Rights for Minors — A business cannot sell the personal information of minors under the age of 16 without their permission and, for children under 13, without parental consent.
  • Right to Non-Discrimination — A business may not discriminate against consumers who exercise their rights under the CCPA.

Earlier this year, as part of ongoing efforts to enforce the CCPA, Attorney General Bonta announced an investigative sweep, and sent letters to businesses with popular streaming apps and devices, alleging that they fail to comply with the CCPA. The sweep focused on the compliance of streaming services with CCPA’s opt-out requirements for businesses that sell or share consumer personal information, including those that do not offer an easy mechanism for consumers who want to stop the sale of their data.  

In February Attorney General Bonta announced a settlement with DoorDash, resolving allegations that the company violated the CCPA and the California Online Privacy Protection Act (CalOPPA) by selling its California customers’ personal information without providing notice or an opportunity to opt out of that sale.

For more information about the CCPA, visit oag.ca.gov/ccpa. To report a violation of the CCPA to the Attorney General, submit a complaint at oag.ca.gov/report.

TELEMARKETING:

Telephone scams, like robocalls and robotexts, can result in people losing millions through phishing texts, imposter scams, and links containing ransomware. In 2023 alone, consumers reported losing more than $10 billion to fraud, this marks a 14% increase over reported losses in 2022. 

In February, Attorney General Bonta joined a coalition of 51 bipartisan attorneys general in issuing a warning letter to Life Corporation, a company that allegedly sent New Hampshire residents scam election robocalls during the New Hampshire primary election. The calls allegedly used artificial intelligence to impersonate the president and discourage voters from participating in the primary. 

In January, Attorney General Bonta joined a coalition of 26 attorneys general in filing a comment letter responding to the Federal Communications Commission’s (FCC) notice of inquiry related to the potential impact of emerging artificial intelligence (AI) technology on efforts to protect consumers from illegal robocalls or robotexts. 

For more tips and information on consumer protection, please visit https://oag.ca.gov/consumers.

 

Attorney General Bonta Joins National Fight for Commonsense Gun Laws

December 29, 2023
Contact: (916) 210-6000, agpressoffice@doj.ca.gov

OAKLAND — California Attorney General Rob Bonta, as part of a coalition of 22 attorneys general, filed a brief in support of a federal law that prohibits firearms dealers from selling handguns and handgun ammunition to persons under the age of 21. The case, McCoy v. Bureau of Alcohol, Tobacco, Firearms & Explosives, is currently pending in the U.S. Court of Appeals for the Fourth Circuit, and addresses a Second Amendment challenge to 18 U.S.C. § 922(b)(1). States across the nation protect their citizens through the application of similar age-based restrictions on the possession, purchase, sale, transfer, or use of firearms because such laws have proven to promote public safety and curb gun violence within their borders.

“Federal law has prevented federally licensed firearms retailers from selling handguns and ammunition for handguns to individuals under the age of 21 for nearly six decades,” said Attorney General Bonta. “As firearms continue to lead to more than 45,000 deaths per year, it is unwise to overturn this long-standing federal prohibition that helps reduce the scourge of gun violence in our communities. We support these federal regulations and those of sister states aimed at ending gun violence through commonsense laws that improve public safety."

In the brief, the states assert that the federal law is constitutional under the Second Amendment, as it is consistent with a historical tradition of federal and state regulations promoting gun safety and protecting communities from gun violence. The coalition argues that the district court’s decision misreads the U.S. Supreme Court’s decision in New York State Rifle & Pistol Association, Inc. v. Bruen, which preserves federal authority to regulate firearms through laws that are “consistent with the Second Amendment’s text and historical understanding.”

Attorney General Bonta urges the Fourth Circuit Court of Appeals to overturn the lower court decision because:

  • The Second Amendment allows governments to enact measures to promote gun safety and protect against gun violence that are consistent with historical tradition. 
  • The challenged restriction is consistent with measures taken by many states and upheld on historical grounds by courts across the country. 

Attorney General Bonta stands with partners throughout the state to continue tackling the issue of gun violence strategically and aggressively by:

Attorney General Bonta joins the attorneys general of Arizona, Colorado, Connecticut, Dealaware, Hawaii, Illinois, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersy, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont, Washington, and the District of Columbia.

A copy of the brief can be found here.

 

Attorney General Bonta Urges U.S. Supreme Court to Uphold Federal Bump Stock Ban

December 27, 2023
Contact: (916) 210-6000, agpressoffice@doj.ca.gov

 

OAKLAND — California Attorney General Rob Bonta, as part of a coalition of 22 attorneys general, filed a brief today in the United States Supreme Court in support of the Bureau of Alcohol, Tobacco, Firearms, and Explosives’ (ATF) federal regulation that bans bump-stock devices and classifies them as prohibited machine guns under the National Firearms Act. In the case of Garland v. Cargill, the district court and the U.S. Court of Appeals for the Fifth Circuit panel agreed with ATF that a federal statute prohibiting machine-guns fairly encompasses bump stocks, but the en banc court reversed. The Supreme Court granted certiorari on November 3.

“It is very clear that bump stocks  readily convert semiautomatic firearms into machine guns, making them illegal under federal law,” said Attorney General Bonta. “The federal government has long regulated automatic weapons and federal laws that apply on a nationwide basis serve as an important complement to State firearms laws that protect our residents and communities from gun violence. The bump stock regulation fits squarely within the text of the federal law banning machine guns, and a centuries-long effort to keep automatic weapons off the streets and out of California.”

In 2017, a gunman opened fire at a music festival in Las Vegas using semi-automatic rifles equipped with bump-stock devices, killing 60 people and wounding 500 more. In the wake of the shooting, ATF issued its final rule concluding that bump stocks qualify as machine guns under a federal statute that prohibits machine guns. Bump stocks are an accessory that can be added to a semiautomatic long gun and enable users to mimic automatic fire by pulling their trigger finger just once to maintain a stream of gunfire. 

Machine guns became commercially available to civilians in the 1920s and their ability to rapidly fire multiple rounds with a single trigger pull provoked regulatory scrutiny. States and the federal government promptly responded by restricting machine guns. In the 1980s, Congress responded decisively, passing legislation to make clear that any device designed to simulate fully automatic fire is a machine gun that is prohibited under federal law.

The brief argues that the ban of bump stocks is consistent with the text of the federal statute prohibiting machine guns, as well as a long history of federal and state laws restricting machine guns. The brief argues that the federal regulation banning bump stocks vindicates the purposes of federal firearms law by complementing state efforts to regulate dangerous weapons, by supporting the states that have already banned them, and by filling in the gaps of state-by-state regulations.

Attorney General Bonta stands with partners throughout the state and nationally to continue tackling the issue of gun violence strategically and aggressively by:

Attorney General Bonta joins the attorneys general of Arizona, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New Mexico, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont, Washington and the District of Columbia in filing the brief.

A copy of the brief can be found here.

 

Attorney General Bonta Joins Amicus Brief Backing Colorado’s Commonsense Age Restrictions on Firearms

December 13, 2023
Contact: (916) 210-6000, agpressoffice@doj.ca.gov

 

OAKLAND — California Attorney General Rob Bonta, as part of a coalition of 19 attorneys general, filed a brief in support of a Colorado law setting 21 as the minimum age to purchase any kind of firearm. The case, Rocky Mountain Gun Owners v. Polis, is currently pending in the U.S. Court of Appeals for the Tenth Circuit. The coalition’s brief argues that a lower court erred its decision to temporarily halt enforcement of the law while the litigation challenging the constitutionality of the law proceeds. States across the nation protect their citizens through the application of similar age-based restrictions on the possession, purchase, sale, transfer, or use of firearms because such laws have proven to promote public safety and curb gun violence within their borders.

“States must have the ability to protect their citizens and communities from gun violence,” said Attorney General Bonta. “The district court's decision to preliminarily enjoin Colorado's law is inconsistent with our nation's historical tradition, as well as longstanding state and federal laws imposing age-based restrictions on the possession, purchase, sale, transfer, and use of firearms. We stand with Colorado and other states in their efforts to end gun violence through commonsense laws that improve public safety."

In the brief, the states assert that Colorado’s law is constitutional under the Second Amendment, as it is consistent with states’ authority and a historical tradition of federal and state regulations promoting gun safety and protecting communities from gun violence. The coalition argues that the district court’s decision preliminarily enjoining Colorado’s law misreads the U.S. Supreme Court’s decision in New York State Rifle & Pistol Association, Inc. v. Bruen, which preserves states’ authority to regulate firearms through laws that are “consistent with the Second Amendment’s text and historical understanding.”

Attorney General Bonta urges the Tenth Circuit Court of Appeals to overturn the district court decision because:

  • The Second Amendment allows states to enact varied measures to promote gun safety and protect against gun violence consistent with historical tradition, and states have long exercised this power by enacting laws to promote safety, prevent crime, and minimize gun violence within their borders.
  • Colorado’s age-based restrictions are consistent with measures taken by other states and fall comfortably within states’ authority to regulate firearms. Numerous States and the District of Columbia impose age-based restrictions regarding the use, purchase, transfer, or possession of firearms. Courts have previously upheld these restrictions relying on the historical record as is now required by Bruen.

 Attorney General Bonta stands with partners throughout the state to continue tackling the issue of gun violence strategically and aggressively by:

Attorney General Bonta joins the attorneys general of Illinois, Arizona, Connecticut, Delaware, Hawaii, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New York, Oregon, Pennsylvania, Rhode Island, Vermont, Washington, and the District of Columbia in filing the brief.

A copy of the brief can be found here. 

 

Attorney General Bonta's Sponsored Bill to Strengthen Concealed Carry License Law Moves to Governor's Desk

September 12, 2023
Contact: (916) 210-6000, agpressoffice@doj.ca.gov

SACRAMENTO — California Attorney General Rob Bonta issued the following statement after Senate Bill 2, authored by Senator Anthony Portantino and co-sponsored by Attorney General Bonta and Governor Newsom, was passed by the Assembly and Senate and sent to Governor Newsom for signature:

“Addressing gun violence is critical to protecting public safety,” said Attorney General Rob Bonta. “Thoughts and prayers in response to gun violence will never be enough: We need courageous action by our leaders — here in California and beyond. I sponsored Senate Bill 2 to provide stronger protections for our communities, and am grateful for the leadership demonstrated by our legislature in moving this bill forward. Senate Bill 2 will strengthen our concealed carry permit laws to help ensure that dangerous individuals may not carry guns in public — especially in sensitive places where our children gather — and prevent the horrific tragedies that we have seen far too often. I thank Senator Portantino and our state leaders for getting this bill on the Governor’s desk, and for our joint efforts to enact commonsense constitutional laws that protect Californians.”

 

Attorney General Bonta Signs on as Co-Sponsor of Senator Wiener’s Legislation to End Harmful Delay Tactics in Forced Arbitration

April 11, 2023
Contact: (916) 210-6000, agpressoffice@doj.ca.gov

SACRAMENTO – California Attorney General Rob Bonta today announced that his office is co-sponsoring Senate Bill 365 (SB 365), legislation by Senator Scott Wiener aimed at leveling the legal playing field with respect to forced arbitration. SB 365 seeks to put an end to a legal loophole in forced arbitration cases where corporations are able to automatically delay court proceedings during the pendency of an appeal on a failed motion to compel arbitration, directly hampering access to justice for workers and consumers. SB 365 has been referred to the Senate Judiciary Committee, and will be heard this afternoon.  

"Big businesses shouldn't be allowed to use their legal weight to sweep worker and consumer concerns under the rug," said Attorney General Rob Bonta. "Whether it's because of a defective product or failure to pay adequate wages, SB 365 will help protect timely access to justice. I'm proud to stand with Senator Wiener as a co-sponsor of SB 365. Together, we're fighting back against corporate abuse and in support of everyday Californians."

“I’m honored and grateful to have Attorney General Bonta’s support in our effort to rein in corporate abuse of forced arbitration clauses,” said Senator Scott Wiener. “Corporations should not be able to use their immense resources to bully workers and consumers into unfavorable settlements. SB 365 is a commonsense reform that will allow workers and consumers to keep disputes with corporations from being put on ice.” 

“We are proud to stand with Attorney General Rob Bonta in strong support of SB 365 to put workers and consumers back on track towards justice when their rights have been violated,” said Greg Rizio, President, Consumer Attorneys of California. “Current law in California favors big corporate defendants by allowing these corporations to knowingly file frivolous appeals in order to delay court proceedings for years. SB 365 would allow those cases to move forward, protecting meaningful access to justice for countless Californians.”

“We look forward to joining efforts with Attorney General Rob Bonta on this critical measure that will stop corporations from filing meritless appeals only to delay and obstruct workers’ access to justice,” said Mariko Yoshihara, Policy Director for the California Employment Lawyers Association. “When a court finds an arbitration contract to be unlawful, a worker should be able to proceed with their claim and not have to wait years for the employer’s frivolous appeal to first be decided.”

Under current California law, corporations are able to abuse arbitration provisions to delay court actions by workers and consumers for years through the appeals process. When a court denies a defendant’s petition to compel a case to private arbitration, current law allows corporations in many cases to halt proceedings by filing an appeal that can take months or years to be heard. Meanwhile, workers and consumers are forced to wait as the harms they face go unaddressed.

These delays can directly undermine civil cases brought against a corporation as key witnesses may lose important documents, forget the facts of a case, or move away. In contrast, corporations have the time and resources to wait out lengthy appeals processes, while workers and consumers typically do not, and may choose to settle rather than delay resolution while the years long appeals process plays out. These years long appeals can happen even in extreme cases where the arbitration clauses are clearly unenforceable.

SB 365 would prevent injustice by ensuring that cases can proceed while an appeal is heard. The bill establishes that an appeal of a court’s decision denying a corporation’s motion to compel arbitration will not automatically stay the consumer's or worker’s court proceedings in the trial court while the appeal is pending. More than half of America’s workforce has been bound by forced arbitration clauses as a condition of employment, and such clauses are a common feature of consumer agreements as well. 

SB 365 is also sponsored by the California Employment Lawyers Association (CELA) and Consumer Attorneys of California (CAOC). 

                                                                                                      

Attorney General Bonta, Assemblymember Maienschein Announce Bill to Compensate Victims of Consumer Protection Violations

April 7, 2023
Contact: (916) 210-6000, agpressoffice@doj.ca.gov

AB 1366 would establish restitution fund to make victims of consumer fraud whole, even if the business that defrauded them goes bankrupt or is insolvent  

SAN DIEGO — California Attorney General Rob Bonta, and Assemblymember Brian Maienschein (D-San Diego), today announced new legislation, Assembly Bill 1366 (AB 1366) to protect victims of predatory businesses found to have violated California consumer protection laws. While current state law allows victims to be eligible for restitution after a judgment has been reached, in many cases of successful prosecutions by the Attorney General, these businesses collapse or become insolvent, leaving no resources to compensate victims for their losses. The legislation, authored by Assemblymember Maienschein and sponsored by Attorney General Bonta, would establish a new Victims of Consumer Fraud Restitution Fund in the state Treasury that would be funded by the penalties paid by businesses that violate the law, and would be used to help make victims whole.

“True justice is not served when victims are left behind,” said Attorney General Rob Bonta. “While our office continues to hold predatory businesses accountable for misconduct, the success feels hollow when we know that the consumers who were defrauded cannot be made whole because the business has no money left to compensate its victims for their losses. This legislation would create a mechanism to help compensate victims in such situations. I urge our legislature to join the states that have already implemented this simple and commonsense protection for victims.”

“When a predatory business takes advantage of a consumer, it’s only right that the proceeds gained from illegal conduct should go towards compensating victims rather than remaining in the bank accounts of bad actors,” said Assemblymember Brian Maienschein. “AB 1366 will ensure that victims can and will receive restitutions for the wrongdoings they endure by crooked businesses on the brink of collapse."

“The Victims of Consumer Fraud Restitution Fund legislation will be an effective, commonsense addition to California‘s consumer protection toolkit," said Professor Christopher L. Peterson, John J. Flynn Endowed Professor of Law, University of Utah. "AB 1366 is an example of strong leadership in the fight to put consumers first and to stop scammers and predatory companies from profiting through deceit."

Under AB 1366, the restitution would be funded from the ill-gotten gains of businesses that violate California’s consumer protection laws, rather than through taxes or fees charged to law-abiding businesses. Specifically, AB 1366 would allow the Attorney General to seek the remedy of disgorgement in actions brought under the Unfair Competition Law and False Advertising Law. Disgorgement would require companies that have violated the law to give up the profits that they made through their illegal conduct. These funds would be held in the new Restitution Fund as a future source of funding to help provide restitution to victims who cannot otherwise be made whole by the defendant who defrauded them. 

Attorney General Bonta cites a number of instances where the California Department of Justice successfully obtained judgments against a company where victims were unable to obtain restitution due to insolvency or collapse of the company after prosecution:

  • In November 2022, Attorney General Bonta obtained a $20 million judgment against Paul Blanco’s Good Car Company. Ultimately, Paul Blanco became insolvent, went out of business and left its victims with little to no compensation.
  • In March 2016, the California Department of Justice obtained a $1.1 billion judgment against Corinthian Colleges, Inc., a predatory chain of for-profit schools. That judgment ordered Corinthian to pay $820 million in restitution to tens of thousands of defrauded students in California, which went unpaid by the company following Corinthian’s bankruptcy filing and liquidation.
  • In September 2016, the California Department of Justice secured a multistate judgment against USA Discounters, which had defrauded and illegally discriminated against servicemembers at stores outside military bases across the country. While the Attorney General’s Office secured $7 million in debt relief for more than 4,000 California victims through the bankruptcy, the company — which had closed and liquidated in bankruptcy — had insufficient assets left to make all of its victims whole.  

While California has strong consumer protection laws, other states have stepped ahead in providing this safeguard for consumers. For example, attorneys general in some other states — including New York and Arizona — can obtain disgorgement under their consumer protection laws, but this is not the case under California law. Additionally, the federal government has established the Civil Penalty Fund, allowing the Consumer Financial Protection Bureau to compensate victims who haven’t received full compensation for their harm through redress paid by the defendant.

Attorney General Bonta, Governor Newsom Take On Big Oil Together With Newly Signed Law

March 28, 2023
Contact: (916) 210-6000, agpressoffice@doj.ca.gov

“Fighting to even the scales for California consumers” 

SACRAMENTO — California Attorney General Rob Bonta and Governor Gavin Newsom today announced the signing of legislation to increase accountability and transparency in the gas industry. Today, surrounded by legislators and community leaders in the rotunda of the California State Capitol, Governor Gavin Newsom signed legislation cosponsored by Attorney General Bonta and authored by Senator Nancy Skinner to implement the strongest state-level oversight and accountability measures on Big Oil in the nation  bringing transparency to California’s oil and gas industry, shining new light on the corporations that have for decades operated in the shadows while ripping families off and raking in record profits.

“Record high retail gas prices — and record-breaking profits for Big Oil — hurt those who can least afford it most of all,” said Attorney General Rob Bonta. “For too long, Californians have been left in the dark when it comes to the practices of the gas industry. And while oil companies have been lining their pockets, many Californians are struggling to make ends meet. I proudly stand with the Governor as he signs into law our cosponsored bill to bring accountability and transparency to the gas industry. Together, we are fighting to even the scales for California consumers and take this burden off their shoulders.” 

Authored by Senator Nancy Skinner (D-Berkeley), co-sponsored by Attorney General Bonta and Governor Newsom and approved by a supermajority in both the Senate and Assembly, SBx1-2 creates a dedicated, day-in and day-out, independent watchdog to root out price gouging by oil companies and authorizes the California Energy Commission (CEC) to create a penalty to hold the industry accountable. The law will go into effect on June 26, the 91st day after the end of the special session. 

Learn more about the new law here. 

WHY TRANSPARENCY MEASURES MATTER: When the law’s new transparency and oversight requirements go into effect at the end of June, the state will begin receiving more information than ever before, including last year when it appeared that oil producers suppressed supply to drive up prices and rake in record profits. Industry knows that the new independent watchdog division will be closely monitoring them and will refer any violation of law — including industry misconduct or market manipulation — to the Attorney General’s Office for prosecution.