California Democrats passed these 5 liberal laws, then big business challenged them

California business groups often play defense in the Capitol, where labor-aligned Democrats are dominant.

But big-spending corporations can gain the upper hand in statewide elections with initiatives they place on the ballot.

That tactic emerged a dozen years ago when oil companies like Texas-based Valero Energy and Tesoro contested a groundbreaking 2006 climate change law that set goals to return California’s emissions to 1990 levels by 2020.

After surviving the 2010 referendum, the state ended up beating that goal by four years.

Since then, corporations have employed this strategy to challenge laws or at least delay their implementation, especially as Democrats grew dominant in the Legislature with supermajorities in both the Assembly and Senate.

Here’s a roundup of five noteworthy ballot measure campaigns funded by corporations over the past decade and how they panned out.

What happened to the gig workers?

Gig companies like Uber, Lyft, DoorDash and GrubHub successfully carved themselves out of a landmark labor law when voters passed Proposition 22 in 2020. The initiative exempted app-based drivers and deliverers from Assembly Bill 5, which generally required companies to provide employment benefits to more workers.

Two legal challenges to Prop. 22 are making their way through the courts. In August 2021, an Alameda County Superior Court judge deemed Prop. 22 unconstitutional after a group of drivers supported by the Service Employees International Union sued the state earlier that January. Oral arguments in the appeals case are scheduled for Dec. 13.

In a separate federal court case, the gig companies and a group of rideshare drivers have asked the 9th Circuit Court of Appeals to rule AB 5 is unconstitutional, Bloomberg Law reported. Oral arguments took place in July, but a decision has yet to be released. Any decision will likely be appealed to the U.S. Supreme Court.

In the meantime, drivers are still being classified as independent contractors. SEIU contends these drivers are being misclassified, while the companies argue the judge’s stay protects them while the cases make their way through court.

Are California ballot measures a ‘parallel legislature’ for wealthy interests? Labor thinks so

Banning plastic bags

Plastics corporations used the referendum system to delay implementation of a 2014 law that banned retailers from distributing free single-use plastic bags to customers.

After then-Gov. Jerry Brown signed the law, the industry-backed coalition dumped over $5 million into signature-gathering efforts to put a referendum on the 2016 ballot. But after the petitions were approved, the opposition spent less than half a million dollars on the campaign, suggesting the referendum was only meant to delay the law.

Voters upheld the plastics ban, with 52% voting “yes” on Proposition 67.

Reinstating a cash bail system

Bail bond companies in 2020 successfully overturned a California law that abolished the state’s cash bail system in favor of risk assessments, which supporters argued were more equitable.

Following the same playbook as the plastic corporations, the bail bond industry filed for a referendum a day after Gov. Brown signed the bill in late August 2018.

Unlike the plastic referendum though, though, voters overwhelmingly sided with the bail bond industry’s measure and reinstated cash bail voting “no” on Proposition 25. The bondsmen allied themselves with far-left activists who argued that the risk assessment model promoted inequity as much as or more than the cash bail system.

Did Big Tobacco really lose?

A 2020 law banned the sale of flavored tobacco products and menthol cigarettes in California to protect kids from getting addicted at a young age. Companies like R.J. Reynolds and Philip Morris International bankrolled a signature-gathering campaign to delay implementation of the law and put it on the 2022 ballot. But after the measure qualified for the ballot, the opposition backed off on campaigning.

“There wasn’t really a major effort from them to push it through,” said Lindsey Freitas at the Campaign for Tobacco-Free Kids.

Just like with the plastic industry’s referendum seven years ago, California voters overwhelmingly upheld the state’s ban on flavored tobacco products, with over 63% voting “yes” on Proposition 31. The tobacco industry pocketed an estimated $780 million from menthol cigarettes alone during the extra 22 months the law went unenforced, according to an analysis of cigarette tax stamps by researchers at the Campaign for Tobacco-Free Kids.

The tobacco companies, meanwhile, continue to challenge the ban in court. R.J. Reynolds filed a lawsuit on Nov. 17 in federal court that could further delay implementation of the ban. The companies claim that under the federal Tobacco Control Act, state and local governments can’t restrict what products can be sold. California’s flavor ban would be an attempt to limit specific types of products on the market, the lawsuit alleges, and it would also violate the Commerce Clause by attempting to regulate manufacturers in other states

The companies are asking for a preliminary injunction to halt the ban five days after Secretary of State Shirley Weber certifies the election results. Reynolds brought a similar case against Los Angeles County’s ban on flavored tobacco products. That case now awaits an appeal to the U.S. Supreme Court after the 9th Circuit court ruled against the companies in March.

‘Sign here to lower gas prices’

You’ve probably seen the people with clipboards outside the supermarket. They’ll stop you and ask something along the lines of, “Do you want lower gas prices?” Then they’ll beg you to sign their petition.

Earlier this year, California banned the drilling of new oil and gas wells within 3,200 feet of homes and schools. This “buffer-zone” would help protect public health, lawmakers said. Just a few days after Gov. Gavin Newsom signed the law, the industry group known as the California Independent Petroleum Association filed a petition to put a referendum on the 2024 ballot. If the campaign gets enough signatures, the law will be suspended until after voters have their say in two years.

The industry coalition announced on Oct. 20 that it had already raised over $8.1 million and petitioners would start hitting the streets that day to collect signatures. The group has yet to file contribution and expenditure documents with the state.