Thomas Donohue. (Courtesy photo)

A new generation of class action lawyers are bringing "unprecedented waves of new lawsuits" against American companies, raising the cost of doing business while harming consumers and threatening jobs, according to U.S. Chamber of Commerce CEO Thomas Donohue.

Donohue spoke twice Thursday at the Chamber's "State of American Business 2020" program, first giving the keynote address and later leading a question and answer session with the press. Both times he discussed the class action threat.

Despite Chamber-led legal reforms at the federal level, such as the Class Action Fairness Act of 2005, Donohue said class action suits have tripled in the past decade. Private lawyers often represent states and municipalities, suing businesses on a contingency fee basis, he noted.

"The public nuisance doctrine has become an effective tool, making it easier for them to sue," Donohue said. He suggested under the doctrine in the future "automakers and cellphone makers might be held responsible for distracting drivers in accidents they have."

Class action fairness will remain a major goal of the U.S. Chamber Institute for Legal Reform this year, and Donohue says it will continue to spend "millions a year" on class action reform.

Some 22 years ago Donohue established the Institute, which advances major reforms in the courts, at the state and federal levels, and in elections for state attorneys general and Supreme Court judges. Harold Kim was named president of the institute last month.

Donohue also has expanded the activities of the U.S. Chamber Litigation Center, the Chamber's own law firm, which often represents the business community's interests in the courts. John Wood has been general counsel of the Litigation Center since November 2018.

On Jan. 3 Wood's legal team filed briefs in the Chamber's suit against California, seeking to enjoin the state's new anti-arbitration legislation. The law was supposed to go into effect on Jan. 1, but the Chamber won a temporary restraining order delaying it while the case is pending.

Donohue criticized California and other states that are passing such local laws to deal with national issues, saying they are creating "a patchwork of state regulations with different standards, creating conflict for business, confusion for consumers and increased costs for everyone."

He said the California Consumer Privacy Act, which went into effect last week, will cost small businesses about $50,000 each.

"Consumers do need better protection for their data," he acknowledged, but the Chamber wants a nationwide data privacy policy, not one set state by state.

He said national, not state, policies are also needed on net neutrality, fiduciary rules for financial investments, and labor regulations, such as those defining who is an independent contractor.

Donohue said, "There is more at stake here than a couple of states passing a couple of bad laws," and that the Chamber would bring its "full weight" to bear on seeking national solutions.

In general, Donohue said, "The state of American business in 2020 is uncertain but positive, growing and hopeful."

During the question and answer session, Neil Bradley, the Chamber's chief policy officer, said a business needs the right surroundings to grow. "There is nothing that can replace a good business environment, [fewer] regulations, and low taxes for the ease of starting a new business," Bradley said.

Other areas where Donohue said the Chamber will be active this year include:

• Supporting bipartisan bills on reasonable immigration reform and climate change.
• Driving solutions at the state level to deal with the nation's worker shortage.
• Pushing to open up more foreign markets to American goods and services, including "tearing down barriers to trade and limiting use of tariffs." He said 95% of the consumers of U.S. products live abroad.
• Supporting the World Trade Organization and safeguarding its dispute settlement system.
• Encouraging more startups, initial public offerings and creation of public companies.
• Strongly opposing other countries' efforts to impose a digital services tax.