Business
Uber — a target of car crash lawsuits — pushes for law to limit California lawyer fees
The long-simmering fight between some of L.A.’s best-known billboard attorneys and Uber, one of their most frequent targets, is poised to spill out of the courtroom and onto the November ballot.
The ride-share giant is gathering signatures for an initiative that, if passed by voters, would cap how much attorneys can earn in vehicle collision cases. The company pledges the change will give victims a larger cut of their settlement money, alleging predatory attorneys are inflating medical bills to increase their own profits.
Lawyers claim it will decimate their lucrative niche — car crash lawsuits in the automobile haven that is California — and ultimately leave thousands of people with small or challenging cases unable to sue because they can’t find an attorney.
This fight, lawyers say, is existential.
Attorneys from Sweet James and Jacoby & Meyers — the names and faces of which will be imprinted in the minds of most California drivers — have given almost $1 million to a committee opposing the ballot measure, according to campaign filings. Dozens of other deep-pocketed attorneys have joined, raising an impressive war chest already surpassing $46 million.
“Uber knows darn well what they’ve done,” said Nicholas Rowley, among those leading the opposition. “This law is designed to wipe out ordinary working people’s ability to get representation.”
Attorneys have condemned the fee cap as a Trojan horse meant to trick voters into wrecking the delicate math behind personal injury lawsuits. Currently, personal injury attorneys typically take 33% to 40% of a client’s payout. That is enough, they say, for them to earn a living and risk taking cases on a contingency fee basis — meaning, if they lose, they don’t get paid.
Uber’s proposal would cap attorney fees for car crash cases at 25% and require extra costs — filing fees, depositions, experts — to be calculated before the fee split rather than coming out of the client’s portion.
The two sides have conflicting views of who would be expected to pay for medical fees, which often drain a significant portion of an injured client’s payout. Attorneys said in order to guarantee clients get 75% of the money, lawyers will have to foot the bill for these medical costs, opening the possibility they would walk away with nothing. Uber said the question of who covers medical costs is “not contemplated by the measure” andit expects clients would pay.
The measure would tightly limit what medical expenses can be claimed and curb most damages to rates based on insurance. A doctor-led political action committee opposing the measure has raised more than $4 million, according to campaign finance records, arguing it will prevent Californians from getting treatment.
Uber said in a statement that nothing in the measure prevents car accident victims from securing doctors and lawyers. Instead, the company said, the measure is aimed at tackling a perennial problem in California’s legal system: attorneys pushing car crash victims into expensive surgeries in order to fatten their fees. The only Californians impacted, Uber claims, will be “shady billboard lawyers whose business model relies on abusing auto accident victims for their own personal gain.”
“Californians deserve a system that prioritizes victims over billboard lawyers,” said Adam Blinick, Uber’s head of public policy. “Capping attorney fees, banning kickbacks, and ending inflated medical billing are common-sense reforms that will protect auto accident victims and lower costs, and we’re confident voters will agree.”
Uber has poured fuel on the fire with federal racketeering lawsuits targeting both Downtown LA Law Group, or DTLA, and Jacob Emrani, two prominent personal injury law offices in Southern California. The lawsuits allege the attorneys had “side agreements” with certain doctors to inflate medical bills for unnecessary procedures to get a larger payout.
In an Instagram post, DTLA called the lawsuit a “calculated attempt by a billion-dollar corporation” to suppress legitimate claims. An attorney representing Emrani called it meritless and part of a campaign “to shut the courthouse doors to victims injured by Uber drivers.”
Gearing up for a fight, Consumer Attorneys of California, a powerful trial lawyer trade group, is pushing three ballot measures of its own, including one seeking to increase legal liability for ride-share companies if a passenger is sexually assaulted by a driver and the other aiming to nullify the fee-capping measure if it passes. Billboards have sprung up across Los Angeles reminding Californians that Uber is the subject of a string of recent New York Times investigations into sexual assault by drivers.
A billboard on West Pico Boulevard and Vermont Avenue in Los Angeles informs passersby of sexual assaults reported to Uber.
(Jason Armond/Los Angeles Times)
The company said it has invested billions in keeping riders safe and has “done more than any other company to confront” sexual violence.
Consumer Watchdog, a consumer advocacy group that sponsored some of the billboards and receives funding from trial attorneys, put out a “consumer alert” branding the fee cap as a “license to kill” measure, claiming it would ultimately pave the way for Uber to move forward with robotaxis without worrying about getting sued. Uber said this was “flat-out untrue” and the measure has nothing to do with autonomous vehicles.
The push by Uber comes at a tense point for California’s legal bar. The Times reported this fall on private investors looking to bankroll California sex abuse cases, and separate allegations of fraudulent lawsuits and unethical conduct by Downtown LA Law Group, a firm known for car crash lawsuits that played a prominent role in L.A. County’s $4-billion sex abuse settlement.
DTLA has denied all wrongdoing and said it operates “with unwavering integrity, prioritizing client welfare.”
Some attorneys worry about how voters will perceive their industry when it’s time to cast ballots.
“I’ll tell you straight up, we could do a better job policing ourselves,” said Rowley, who said he believed the State Bar had historically been weak on California lawyers. “It creates a situation where Uber can do what it’s doing.”
The exterior of Downtown LA Law Group in Los Angeles.
(Carlin Stiehl/Los Angeles Times)
Calls for reform within California’s legal community have gained momentum in recent months.
Joseph Nicchitta, the county’s interim chief executive officer, called on the State Bar to implement “badly needed ethical reforms” that would make big personal injury cases less profitable for lawyers. Attorney and business advocacy groups have made public pleas to keep private equity out of the state’s legal landscape, worrying it fuels frivolous lawsuits. Gov. Gavin Newsom has similarly expressed unease.
“Our legal system is meant to provide justice, transparency, and accountability — not a business model that uses survivors of abuse or trauma as a revenue stream,” said a spokesperson for the governor. “California can — and must — hold two truths at the same time: standing unequivocally with survivors and victims, while also demanding integrity within the law firms and other businesses that work within our legal system.”
Californians unhappy with problem law firms already have a way to ding them without the ballot measure, Uber’s opponents argue. A new law went into effect Jan. 1 giving private citizens the right to sue an attorney for unethical practices. Many such practices are already illegal but seldom prosecuted. That includes advertising containing false promises and using third parties to solicit clients.
The Times reported this fall that nine plaintiffs represented by Downtown LA Law Group were paid by recruiters to sue the county for sex abuse in juvenile halls, four of whom said they were told to make up claims. The firm has denied paying anyone to file lawsuits.
“This is exactly why we wrote the bill,” said Sen. Tom Umberg (D-Santa Ana), a lawyer who oversees the Senate Judiciary Committee, in response to The Times Dec. 31 story on the firm. “I expect that someone will take it upon themselves to actually enforce that law.”
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Politicians in Washington and the reporters who cover them have an often adversarial relationship.
But on the last Saturday in April, they gather for an irreverent celebration of press freedom and the First Amendment at the Washington Hilton Hotel: The White House Correspondents’ Association dinner.
Hosted by the association, an organization that helps ensure access for media outlets covering the presidency, the dinner attracts Hollywood stars; politicians from both parties; and representatives of more than 100 networks, newspapers, magazines and wire services.
While The Times will have two reporters in the ballroom covering the event, the company no longer buys seats at the party, said Richard W. Stevenson, the Washington bureau chief. The decision goes back almost two decades; the last dinner The Times attended as an organization was in 2007.
“We made a judgment back then that the event had become too celebrity-focused and was undercutting our need to demonstrate to readers that we always seek to maintain a proper distance from the people we cover, many of whom attend as guests,” he said.
It’s a decision, he added, that “we have stuck by through both Republican and Democratic administrations, although we support the work of the White House Correspondents’ Association.”
Susan Wessling, The Times’s Standards editor, said the policy is a product of the organization’s desire to maintain editorial independence.
“We don’t want to leave readers with any questions about our independence and credibility by seeming to be overly friendly with people whose words and actions we need to report on,” she said.
The celebrity mentalist Oz Pearlman is headlining the evening, in lieu of the usual comedy set by the likes of Stephen Colbert and Hasan Minhaj, but all eyes will be on President Trump, who will make his first appearance at the dinner as president.
Mr. Trump has boycotted the event since 2011, when he was the butt of punchlines delivered by President Barack Obama and the talk show host Seth Meyers mocking his hair, his reality TV show and his preoccupation with the “birther” movement.
Last month, though, Mr. Trump, who has a contentious relationship with the media, announced his intention to attend this year’s dinner, where he will speak to a room full of the same reporters he often derides as “enemies of the people.”
Times reporters will be there to document the highs, the lows and the reactions in the room. A reporter for the Styles desk has also been assigned to cover the robust roster of after-parties around Washington.
Some off-duty reporters from The Times will also be present at this late-night circuit, though everyone remains cognizant of their roles, said Patrick Healy, The Times’s assistant managing editor for Standards and Trust.
“If they’re reporting, there’s a notebook or recorder out as usual,” he said. “If they’re not, they’re pros who know they’re always identifiable as Times journalists.”
For most of The Times’s reporters and editors, though, the evening will be experienced from home.
“The rest of us will be able to follow the coverage,” Mr. Stevenson said, “without having to don our tuxes or gowns.”
A former female staffer who worked for Beast Industries, the media venture behind the popular YouTube channel MrBeast, is suing the company, alleging she was sexually harassed and fired shortly after she returned from maternity leave.
The employee, Lorrayne Mavromatis, a Brazilian-born social media professional, alleges in a lawsuit she was subjected to sexual harassment by the company’s management and demoted after she complained about her treatment. She said she was urged to join a conference call while in labor and expected to work during her maternity leave in violation of the Family and Medical Leave Act, according to the federal complaint filed Wednesday in the U.S. District Court for the Eastern District of North Carolina.
“This clout-chasing complaint is built on deliberate misrepresentations and categorically false statements, and we have the receipts to prove it. There is extensive evidence — including Slack and WhatsApp messages, company documents, and witness testimony — that unequivocally refutes her claims. We will not submit to opportunistic lawyers looking to manufacture a payday from us,” Gaude Paez, a Beast Industries spokesperson, said in a statement.
Jimmy Donaldson, 27, began MrBeast as a teen gaming channel that soon exploded into a media company worth an estimated $5 billion, with 500 employees and 450 million subscribers who watch its games, stunts and giveaways.
Mavromatis, who was hired in 2022 as its head of Instagram, described a pervasive climate of discrimination and harassment, according to the lawsuit.
In her complaint, she alleges the company’s former CEO James Warren made her meet him at his home for one-on-one meetings while he commented on her looks and dismissed her complaints about a male client’s unwanted advances, telling her “she should be honored that the client was hitting on her.”
When Mavromatis asked Warren why MrBeast, Donaldson, would not work with her, she was told that “she is a beautiful woman and her appearance had a certain sexual effect on Jimmy,” and, “Let’s just say that when you’re around and he goes to the restroom, he’s not actually using the restroom.”
Paez refuted the claim.
“That’s ridiculous. This is an allegation fabricated for the sole purpose of sparking headlines,” Paez said.
Mavromatis said she endured a slate of other indignities such as being told by Donaldson that she “would only participate in her video shoot if she brought him a beer.”
“In this male-centric workplace, Plaintiff, one of the few women in a high-level role, was excluded from otherwise all-male meetings, demeaned in front of colleagues, harassed, and suffered from males be given preferential treatment in employment decisions,” states the complaint.
When Mavromatis raised a question during a staff meeting with her team, she said a male colleague told her to “shut up” or “stop talking.”
At MrBeast headquarters in Greenville, N.C., she said male executives mocked female contestants participating in BeastGames, “who complained they did not have access to feminine hygiene products and clean underwear while participating in the show.”
In November 2023, Mavromatis formally complained about “the sexually inappropriate encounters and harassment, and demeaning and hostile work environment she and other female employees had been living and experiencing working at MrBeast,” to the company’s then head of human resources, Sue Parisher, who is also Donaldson’s mother, according to the suit.
In her complaint, Mavromatis said Beast Industries did not have a method or process for employees to report such issues either anonymously or to a third party, rather employees were expected to follow the company’s handbook, “How to Succeed In MrBeast Production.”
In it, employees were instructed that, “It’s okay for the boys to be childish,” “if talent wants to draw a dick on the white board in the video or do something stupid, let them” and “No does not mean no,” according to the complaint.
Mavromatis alleges that she was demoted and then fired.
Paez said that Mavromatis’s role was eliminated as part of a reorganization of an underperforming group within Beast Industries and that she was made aware of this.
Lululemon, the yoga pants and athletic clothing company, has hired a former executive from a rival, Nike, as its new chief executive.
Heidi O’Neill, who spent more than 25 years at Nike, will take the reins and join Lululemon’s board of directors on Sept. 8, the company announced on Wednesday.
The leadership change is happening during a tumultuous time for Lululemon, which had grown to $11 billion in revenue by persuading shoppers to ditch their jeans and slacks for stretchy leggings. But lately, sales have declined in North America amid intense competition and shifting fashion trends, with consumers favoring looser styles rather than the form-fitting silhouettes for which Lululemon is best known.
“As I step into the C.E.O. role in September, my job will be to build on that foundation — to accelerate product breakthroughs, deepen the brand’s cultural relevance, and unlock growth in markets around the world,” Ms. O’Neill, 61, said in a statement.
Lululemon, based in Vancouver, British Columbia, has also been entangled in a corporate power struggle over the company’s future. Its billionaire founder, Chip Wilson, has feuded with the board, nominated independent directors and criticized executives.
Lululemon’s previous chief executive, Calvin McDonald, stepped down at the end of January as pressure mounted from Mr. Wilson and some investors. One activist investor, Elliott Investment Management, had pushed its own chief executive candidate, who was not selected.
The interim co-chiefs, Meghan Frank and André Maestrini, will lead the company until Ms. O’Neill’s arrival, when they are expected to return to other senior roles. The pair had outlined a plan to revive sales at Lululemon, promising to invest in stores, save more money and speed up product development.
“We start the year with a real plan, with real strategies,” Mr. Maestrini said in an interview this year. “We make sure decisions are made fast.”
Lululemon said last month that it would add Chip Bergh, the former chief executive of Levi Strauss, to its board to replace David Mussafer, the chairman of the private equity firm Advent International, whom Mr. Wilson had sought to remove.
Ms. O’Neill climbed the organizational chart at Nike for decades, working across divisions including consumer sports, product innovation and brand marketing, and was most recently its president of consumer, product and brand. She left Nike last year amid a shake-up of senior management that led to the elimination of her role.
Analysts said Ms. O’Neill would be expected to find ways to energize Lululemon’s business and reset the company’s culture in order to improve performance.
“O’Neill is her own person who will come with an agenda of change,” said Neil Saunders, the managing director of GlobalData, a data analytics and consulting company. “The task ahead is a significant one, but it can be undertaken from a position of relative stability.”
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