General Archives - Reform CIPA

California Businesses Are Being Shaken Down by a 1967 Wiretapping Law

California businesses and nonprofits are facing a growing threat from a law that was never designed for the modern internet.

The California Invasion of Privacy Act, or CIPA, was enacted in 1967 to stop illegal wiretapping in an era of landlines and phone booths. Today, however, it is increasingly being used to target ordinary website technologies — analytics tools, chat functions, cookies and session replay software — that businesses of every size rely on to operate in the modern economy. What began as a criminal wiretapping statute has evolved into a massive litigation machine.

California Must Modernize Privacy Law—Before It Hurts the People It Was Meant to Protect

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Every week, I hear from Californians who are trying to make ends meet. A small business owner worried about keeping the lights on. A nonprofit leader stretched thin trying to provide services in their community. A local news outlet fighting to stay afloat in a challenging media landscape. They all tell me the same thing: the cost of living and doing business in California is getting harder to manage. And now, many of them are facing a new and unexpected threat—lawsuits under a 1960s law that was never designed for today’s technological world.

New Report Finds CIPA Demand Letters Have Already Cost Businesses More Than $1 Billion

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Reform CIPA Coalition says findings underscore urgent need to stop predatory lawsuits targeting ordinary website tools

SACRAMENTO, CA — June 15, 2026 — The Reform CIPA Coalition today highlighted the release of a new economic analysis from Oxford Economics finding that California Invasion of Privacy Act demand letters alone may have already cost businesses more than $1 billion, with the broader cost of CIPA-related litigation extending far beyond that figure.

The report, The Economic Costs of CIPA Litigation, examines the growing wave of lawsuits and demand letters filed under California’s decades-old privacy statute. Originally enacted in 1967, CIPA is now being used to target routine website tools such as analytics, chat features, and other technologies commonly used by small businesses, nonprofits, retailers, healthcare providers, and community organizations.

Among the report’s key findings:

The cost of CIPA demand letters alone on businesses is estimated to be at least $1 billion, with some estimates reaching as high as $3 billion.
The average total cost of a CIPA demand letter is approximately $30,000, including settlement payments, legal fees, website remediation, and lost staff time.
The estimated defense costs for filed CIPA lawsuits are approximately $500 million.
The average defense cost for a filed case is estimated at approximately $150,000.

“For a small business, a $30,000 demand letter is not a minor legal expense, it can be the difference between hiring a worker, investing in growth, or simply staying open,” said Greg Van Dyke, Chairman of California Consumer Advocates. “This report confirms what businesses across California have been saying for months: CIPA is being weaponized against ordinary website tools in ways that impose massive costs while doing little to advance consumer privacy.”

According to the report, approximately 3,500 CIPA website-privacy lawsuits have been filed to date, while demand letters are estimated to be far more widespread. The report notes that these letters often seek quick settlements because the cost of fighting the claim can exceed the proposed settlement.

“These are not theoretical costs,” said Tami Goldsmith, Owner of Folsom Lake Heating & Air. “Small businesses are being forced to pay tens of thousands of dollars over commonplace digital tools that help us communicate with customers, schedule appointments, answer questions, and compete online.”

The Reform CIPA Coalition is urging lawmakers to modernize CIPA and clarify that ordinary online tools already governed by California’s modern consumer privacy laws should not trigger abusive lawsuits under a statute written decades before the internet existed.

“California can protect consumer privacy without allowing predatory litigation to drain resources from small businesses, nonprofits, and local employers,” said Robert Sausedo, President and CEO of Community Build Inc. “The Legislature should act now to bring clarity, stop abuse, and ensure privacy laws are enforced in a way that is fair, modern, and workable.”

The full report is available at: https://reformcipa.com/the-economic-costs

About the Reform CIPA Coalition

The Reform CIPA Coalition is a broad coalition of small businesses, business organizations, nonprofits, technology advocates, and community stakeholders working to modernize California’s outdated privacy laws and stop abusive lawsuits targeting ordinary website tools.

During Small Business Month, Reform CIPA Coalition Says Best Way to Support Small Businesses Is to Reform CIPA

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FOR IMMEDIATE RELEASE
Date: April 6, 2026
Contact: [email protected]

Coalition now includes more than 30 small businesses and nearly 40 organizations representing small business interests statewide

SACRAMENTO, Calif. — One of the best ways to celebrate and support small businesses this May is to protect them from abusive litigation tied to outdated interpretations of a 1960s law. In recognition of Small Business Month, the Reform CIPA Coalition today called on California policymakers to modernize the California Invasion of Privacy Act (CIPA), by passing SB 690. The Reform CIPA Coalition continues to grow. Among its 146 coalition members, more than 30 individual small businesses and over 40 organizations representing small business interests across California have joined the movement. Coalition members say momentum is building around the need to clarify that commonplace online tools already regulated under California’s consumer privacy laws should not trigger predatory lawsuits.

“An outdated 1960s law should not be weaponized against businesses using everyday technologies like chat features, appointment scheduling, or analytics tools. These lawsuits drive up costs, discourage investment, and make it harder for small businesses to grow. Senate Bill 690 offers a commonsense fix, and that’s why support for reform continues to expand,” said Michael Hedges, President of the California Small Business Association.

Coalition leaders said reform is not only about legal clarity, but affordability.

“This is an affordability issue caused by a legal issue. When small businesses, like many here in Los Angeles, are forced to spend money defending meritless lawsuits, those costs ripple through the economy. They affect jobs, prices, and local communities. A growing coalition of business leaders is coming together because California needs clear, modern rules that protect privacy without punishing responsible businesses,” said Mitchell Vieyra, Executive Vice President of the Los Angeles County Business Federation (BizFed).

A coalition small business member added:

“California’s small businesses are already navigating rising costs, labor pressures, and economic uncertainty. Being hit with lawsuits over routine website tools that help us communicate with customers and stay competitive is deeply unfair. Reforming CIPA is about protecting small businesses from abusive litigation while preserving strong privacy protections. That’s why more business owners are joining the Reform CIPA Coalition.” — Michelle Leopold, Owner/CMO, Stan’s Ace Hardware

Supporters say the best way to celebrate Small Business Month is to enact reforms that help small businesses survive and grow, not leave them vulnerable to costly lawsuits over routine technologies used every day to serve customers.

Senate Bill 690 would clarify that activities already governed under the California Consumer Privacy Act are not grounds for opportunistic CIPA claims, while maintaining strong privacy protections for consumers.

As Small Business Month continues, Reform CIPA Coalition members urged lawmakers to stand with local employers, entrepreneurs and job creators by advancing common sense reform.

Privacy Law is Being Weaponized Against Small Businesses

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When a 1960s law is being used to shake down small businesses over ordinary website tools, something has gone badly off course, and it is time for Sacramento to act.

The Simi Valley Chamber of Commerce is increasingly concerned about a growing threat to affordability and economic stability in California: predatory lawsuits filed under the California Invasion of Privacy Act, better known as CIPA.

Social Justice Organizations Join Growing Coalition to Reform Outdated CIPA Law

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Sacramento, CA — Many of California’s important community and social justice organizations today announced their support to Reform CIPA, a coalition to modernize California’s outdated wiretapping law. These influential groups join over 100 small businesses, nonprofits, and community-based organizations already signed up to stop abusive lawsuits that are driving up costs for Californians.

The California Invasion of Privacy Act (CIPA), enacted in 1967, was designed to address criminal eavesdropping. For too many years, it has been used by trial attorneys to bring costly litigation targeting routine website tools, creating significant financial burdens for organizations that serve communities across the state.

The following organizations have joined the #ReformCIPA coalition:

Earl “Skip” Cooper Foundation
Chicana Latina Foundation
Community Build Inc.
Golden Years Policy Council
Jesse Miranda Center for Hispanic Leadership
National Diversity Coalition
National Action Network Sacramento
Groundswell for Water & Housing Justice
Greater Sacramento Urban League
The Two Hundred for Homeownership
Time in Destiny Economic Development Coalition
United Latinos Action
YXPLosion

“Small businesses and community organizations are being hit with costly lawsuits for simply operating online in good faith,” said Earl "Skip" Cooper, Black Business Association. “Reforming CIPA is critical to protecting the economic stability of the communities we serve and ensuring these resources stay focused on growth and opportunity—not litigation.”

“Our Latino communities are already feeling the strain of rising costs,” said Robert J. Apodaca, Executive Director, United Latinos Action. “When outdated laws are misused, those costs are passed directly to consumers. Reforming CIPA is about protecting affordability while maintaining strong privacy protections.”

Supporters of Reform CIPA emphasize that reform will not weaken privacy protections. Instead, it will ensure that enforcement is aligned with California’s modern privacy framework, while preventing abusive litigation that increases costs for consumers, limits access to services, and strains community-serving organizations.

For more information, visit: www.ReformCIPA.com

Could New Privacy Law Coalition Help Curb California Wiretapping Litigation? What Businesses Need to Know About CIPA Reform | Fisher Phillips LLP

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A broad coalition of California businesses, nonprofits, healthcare providers, and community organizations formally launched a campaign this week to push for reform of the state law being weaponized against businesses that use standard website tools. The Reform CIPA Coalition is backing the revival of legislative efforts to limit the law’s scope and put a halt to the trend that has led to thousands of lawsuits and countless demand letters, arbitrations, and settlements. The coalition’s April 6 launch is a meaningful development and signals a renewed effort to push for a legislative fix that was paused last year. Here’s what you need to know and some steps you can take as the debate shakes out.

Predatory lawsuits are making California even less affordable | Opinion

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Californians are already paying too much for everything, from groceries and child care to housing and health care. But there’s a hidden cost driving prices even higher, and most people don’t even realize it exists: predatory lawsuits filed against small businesses and nonprofits under an outdated law written more than 60 years ago.

That’s why legislation now moving through Sacramento, Senate Bill 690, authored by Sen. Anna Caballero, D-Merced, is so important. SB 690 would start tackling this issue by clarifying that modern, widely used website tools are governed by today’s privacy laws, not a decades-old statute never intended for the digital age.

The bill is currently advancing through the Legislature and represents a commonsense first step to curbing abusive litigation while maintaining strong consumer protections.

The need for reform is urgent. According to a 2025 study by The Perryman Group, lawsuit abuse costs the average California family $8,306 per year in higher prices and reduced earnings — the highest burden in the nation.

Read the original article.

Reform CIPA Coalition Brings Together Businesses and Organizations from Across the State to Stop Predatory Lawsuits from Driving Up Costs for Californians

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FOR IMMEDIATE RELEASE
Date: April 6, 2026
Contact: [email protected]

Sacramento, CA – A surge in predatory lawsuits under the outdated California Invasion of Privacy Act (CIPA) is inflicting severe economic and community harm across the state. To stop these damaging legal shakedowns and protect affordability for California families, a broad coalition of nonprofits, community organizations, and businesses has launched ReformCIPA.com.

This growing coalition supports legislative solutions like SB 690 to curb this economic and community burden by ensuring modern digital practices are governed by modern privacy laws, rather than a statute written decades before the internet existed. Originally designed in the 1960s to prevent wiretapping, the law is now being exploited by trial lawyers to target organizations over routine website tools, such as chat features and analytics.

“SB 690 helps protect patient privacy while stopping the misuse of an outdated law against providers using standard technology,” said Soua Vang, President & CEO, California Association for Health Services at Home. “It is a first step to restoring clarity and fairness, and keeps the focus where it should be – on patient care.”

Economic Devastation and Rising Costs
These abusive lawsuits are making it increasingly difficult to operate affordably in California. Organizations, including non-profits are flooded with “pay up or get sued” demand letters, and because fighting these claims in court is often more expensive than settling, many are pressured into paying massive, unjust settlements. These legal shakedowns ultimately function as a hidden tax on consumers.

“At a time when affordability is one of the biggest challenges facing California families and California is facing budget deficits, we should not allow predatory lawsuits to drive up costs,” said Robert Rivinius, President, Family Business Association of California. “Amending CIPA will protect consumers while stopping legal shakedowns that hurt small businesses and the communities they serve.”

With everyday Californians already struggling under the weight of rising housing, energy, food, and healthcare costs, forcing small businesses to spend thousands on legal defense guarantees those financial burdens are passed directly to families that can’t afford these prices. Furthermore, this economic drain is happening at a time when the state itself is already facing significant budget deficits and affordability crises.

Draining Community Resources
Beyond the direct economic strain, this wave of litigation is actively damaging local communities. Essential sectors, including healthcare providers, non-profit organizations, and small businesses, are being heavily targeted. Instead of genuinely protecting privacy—which is already robustly guarded by modern laws like the California Consumer Privacy Act (CCPA)—these lawsuits penalize community organizations simply for using standard online tools meant to help them better serve the public. By draining time and vital funds from these groups, predatory litigation directly hurts the vulnerable communities that rely on their services.

To learn more or join the coalition, visit ReformCIPA.com.