Plaintiffs claim the companies — which are not necessarily based in the state but are subject to its laws — have misled consumers about the origin of their products.

“Defendant does not advise U.S. consumers, in its packaging or otherwise, that the supply line for farmed prawns has been tainted by the use of slave labor in Thailand,” reads a complaint against Costco, which contends the shrimp were harvested in waters of Thailand using slave labor.

“This lawsuit seeks to give Californians confidence that they are not serving slavery for dinner,” plaintiff’s attorney Derek Howard, of the Howard Law Firm in Mill Valley, said in a press release.

After the lawsuit was filed, Costco released a statement reiterating the company’s goal “to promote better labor practices through accountability, verification and transparency.” The company’s 2011 supplier code of conduct bars certain practices including use of slave labor, and Costco last year formed a shrimp “task force” to look into the operations of Thai suppliers.

California Transparency in Supply Chains Act

The Costco complaint is one of six separate actions filed in California federal courts in August and September against entities doing business here, including Nestle, Proctor & Gamble and Costco. The plaintiffs are using, in part, disclosures on company websites pursuant to the California Transparency in Supply Chains Act.

The potential legal bonanza comes as state lawyers have become more hands-on in policing the 2010 law, which backers said would stem human trafficking and slavery by requiring public disclosures about how companies are ensuring workers are not being exploited to produce their goods.

The Attorney General’s office recently distributed to large manufacturers and retailers a 50-page “resource guide” on complying with the California Transparency in Supply Chains Act.

Companies this year also received a letter from the AG’s office, informing them that “your company must post on its Internet website the required disclosures if it meets the eligibility criteria – namely, if your company is a retail seller or manufacturer doing business in California and has annual worldwide gross receipts that exceed $100,000,000.”

California Targeted

California is home to courts that tend to be sympathetic to pro-consumer, anti-big business claims. There is also an army of law firms eager to take on the full coffers of large corporations.

To call it venue shopping for these lawsuits “would not be inaccurate,” said John Kloosterman, a lawyer who has advised companies on how to comply with the mandates of the supply chain act.

While other states have decried human trafficking and its connection to goods peddled in the U.S., “California is the only state that has enacted legislation” that requires an online assurance of vigilance, Kloosterman said.

“These lawsuits are about the promise that these companies advertise about the products,” he said. “They allege that they advertise these products are properly made or cultivated and then say, ‘I was led to believe by your website disclosures to believe that they wouldn’t be made by slave labor.’”

He said some companies that had previously established outposts in California have scaled back.

Unlikely Alliances

The notion of tracking a supply chain is being embraced by attorney generals of both political stripes and creating some unlikely alliances. California AG Kamala Harris is in league with Tea Party favorite Florida AG Pam Bondi, for example. But Florida is not requiring the disclosure that California is. Instead, it is releasing “recommended” policies including employee training and policies.

Californians interested in researching products can go to Knowthechain.org and look up a corporation to see if it is complying with the state requirement. The website is supported by Humanity United, a progressive foundation set up by eBay founder Pierre Omidyar and his wife, Pam.

It provides grants to a number of other non-profits, including the Center for American Progress, the Art of Revolution and the Clinton Foundation.

Last year, the group released a presser outing the 85 firms that it believed were silent on the requirements of the transparency act with regard to the state law.

Calls to the California Chamber of Commerce and the California Grocers Association, both of which opposed the supply chain act and represent members subject to the act, went unreturned.

By Joseph Perkins

Inmate lawsuits have become a cottage industry here in California. The Associated Press reports that such litigation has cost the state’s taxpayers more than $200 million over the past 15 years.

Gov. Jerry Brown suggests that much of that litigation is frivolous, ginned up by trial lawyers motivated less by concern for the state’s prison inmates, and more about extracting lucrative legal fees from the state.

“They don’t want to go away,” the governor said last month. “I mean, the name of the game here is, ‘Come to Sacramento and get your little piece of the pie.’”

The lawsuit abuse of which Brown spoke is hardly unique to the state’s penal system. It is a plague California’s business community has complained about for years, with little sympathy from lawmakers in the state capital.

Brown recognizes now just how avaricious the state’s trial lawyers can be. That should fire him up to not only declare war on frivolous inmate lawsuits, but also other categories of litigation where abuses are rampant.

Small business victims

ADA lawsuits. Such litigation takes advantage of regulations, based on the federal Americans With Disabilities Act, that are intended to ensure ease of access to public places, including private businesses.

The regs have provided the means for buck-raking plaintiffs to shake down small businesses by accusing them of ADA violations. The businesses receive a demand letter from a plaintiff citing so many violations, each of which entails a $4,000 fine.

The business owners are advised that they can settle the lawsuit by paying the plaintiff $5,000 or so for his trouble and agreeing to bring their neighborhood dry cleaner or nail salon or bookstore into ADA compliance.

Proposition 65 lawsuits. Businesses that contain one of more than 900 chemicals regulated by Proposition 65 are required by state law to post a warning sign. Several law firms have created a profit center for themselves by suing small businesses that either are not aware that they have chemicals on their premises or that they are required to post a warning to that effect.

There were more than 300 Prop. 65 lawsuits in 2011, from which the state’s trial lawyers pocketed more than $12 million in payments from victimized small businesses.

CEQA lawsuits. The California Environmental Quality Act is used by litigants not to enrich themselves but to thwart the construction of new home communities, commercial developments and even public works projects.

Once filed primarily by environmental groups, which are reflexively anti-growth, CEQA lawsuits are now routinely filed by neighborhood groups, who’ve gotten their piece of the California Dream and don’t want to share with others; by unions, which aim to force developers to accede to high-wage Project Labor Agreements; and even by developers themselves, seeking to hamstring competing developers.

Class Action lawsuits. California is the “undisputed champion of the consumer class action,” according to the American Tort Reform Association.

Ours is the state where Proctor & Gamble settled a class action alleging that it is impossible to get the last 20 percent of the toothpaste out of Crest’s “Neat Squeeze” Tubes.  It is also where Taco Bell spent millions of dollars fighting off a frivolous class action claiming that it improperly advertised that its beef taco contained “seasoned ground beef” when it should have said “taco meat filling.”

There are legislative fixes for each of these categories of lawsuit abuse. All they require is the support of Brown and a Legislature that acknowledges the need for legal reform in the nation’s most litigious state.