California creates $10,000-or-treble-damages remedy for investor interference

On September 21, Reuters reported that Governor Gavin Newsom had signed AB 2305 on September 20, prohibiting capital providers and other business entities from influencing substantive litigation decisions such as client selection and settlement. The law provides statutory damages of $10,000 per violation or three times a client’s damages and applies regardless of how an investment or management-services structure is labeled. For in-house teams buying services from firms connected to outside capital, the law makes decision rights, escalation and fee arrangements part of provider due diligence rather than an internal ownership issue. Law firm client teams should be able to explain the separation between commercial support and professional judgment, while monitoring whether California enforcement changes how buyers assess MSO-backed providers.