Lawsuit relief for business at last.

For the first time in recent memory, legislation that will limit civil lawsuits against California businesses has been enacted.

AB 1394 (Figueroa/Escutia) reforms California's "slack fill" packaging law, which makes it a crime to have "non-functional slack fill" (or empty space) in a retail package.

This

new law represents the culmination of intensive negotiations among the California District Attorney's Association, the Consumer Attorneys of California, environmental groups, consumer groups and the business community. The measure passed both houses of the Legislature with strong bipartisan support.

Current law, the Fair Packaging and Labeling Act, is intended to protect purchasers against deception or misrepresentation.

The law states that packages and their labels should enable consumers to obtain accurate information as to the quantity of the contents of packages in order to facilitate value comparisons.

But the statute has led to the filing of a number of nuisance lawsuits against companies in several industries, including software, toys, soaps and detergents, and cosmetics.

In fact, Albany, Calif. attorney William Henley has gone so far as to form a litigation company called "Intervention Inc." to sue software manufacturers.

Each of his complaints against software makers demands $1 million in restitution and attorneys' fees. According to an interview with him in the Los Angeles Times, he had planned to "start with nine (software) defendants and to spread the litigation out over the whole industry."

Lawsuits targeting computer software and hardware packages are particularly egregious because there is obviously no deception; anyone buying the product knows that he or she is getting a diskette or CD-ROM and an instruction manual.

This new law prevents abusive lawsuits against high-tech companies by exempting such products from the purview of the statute.

Examples of lawsuits against other major industries include the following:

* Toys - One company was sued for slack fill in its toy building sets. The boxes that contained the sets were uniform in size and contained 29 to 33 pieces, depending upon the set. Each box contained an "actual size" representation of the pieces and a clear and conspicuous disclosure as to the number of pieces therein.

* Cleaning Products - One company was sued for its packaging of air freshener and cleaning powder. The container clearly indicated the weight of the contents and the expected number of uses. It was unit-priced for comparison purposes.

* Non-Prescription Drugs - One company was sued for its vitamin tablet packaging because the protective cotton ball allegedly constituted empty space.

The existing slack fill law defines certain types of packaging as misleading, and states that such packaging is illegal. Only two narrow exemptions to that law currently exist: for protection of the contents of the package, and for requirements of machines used to enclose the contents in the package.

The new law expands these two exemptions to 15. The law maintains a strong stance against misleading and fraudulent packaging practices, but provides reasonable parameters that take into account the needs of consumers, as well as the wide range of product-packaging requirements for businesses.

Among the new exemptions for permitting slack fill are:

* Protection of the contents of the package.

* Unavoidable product settling during shipping and handling.

* The need to provide adequate space for the presentation of mandatory labeling information.

* Facilitating the handling of the product, or allowing secondary packaging.

* Where the actual size of the product is visible through the packaging.

* Where the packaging contains a product-delivery device, if such a device is visible to the consumer.

AB 1394 is an important first step in limiting frivolous lawsuits against California businesses. But more reforms are needed to prevent other unwarranted litigation. State laws should strike a balance between protecting consumers and allowing legitimate business practices.

Chris Mitcheli is an attorney and legislative advocate for the Sacramento lobbying firm Carpenter, Snodgrass & Associates, Patrick Shannon is the president of the Silicon Valley-based lobbying firm Shannon Corporate Strategies.