ELK GROVE, CA (MPG) - An Elk Grove small business owner is speaking out after being hit with what she describes as a predatory lawsuit tied to her company’s website, joining a growing coalition pushing for Senate Bill 690 to close what supporters call a legal loophole affecting businesses, nonprofits and public agencies statewide.

Belinda Gutierrez, owner of the family-operated business Elk Grove Plumbing, Drain, Heating and Air, said she was blindsided after receiving a demand letter in November 2025 accusing her company of multiple violations connected to its website’s privacy practices.

The business, founded in 2018, also operates a second location in Galt.

“I was completely shocked and confused,” Gutierrez said. “Even reading it initially, I didn’t understand it. I didn’t even know if it was real.”

After researching the claims, Gutierrez said she learned the lawsuit centered on her company’s website not having a cookie consent banner that allows visitors to accept or reject online tracking tools.

According to the Federal Trade Commission, internet cookies are small pieces of data stored in a user’s web browser while visiting a website. Cookies help websites to recognize returning users and remember information such as login credentials, shopping cart items and site preferences.

“At that time, we didn’t have the cookies banner on our website,” she said. “So this particular law firm decided to sue us for four different violations.”

Among the allegations was wiretapping, a claim Gutierrez said made little sense for her business. She noted that the company’s website includes a chatbot customers can use to communicate online instead of calling directly.

“I’m not wiretapping. I’m not stalking. I’m not listening to their conversations,” she said. “You guys came to my website. That’s all it was.”

According to the Alliance for Legal Fairness, an advocacy and business league supporting legislative efforts such as SB 690, lawsuits like this stem from attorneys using the California Invasion of Privacy Act, or CIPA, as the basis for claims involving online features such as chatbots, analytics tools and cookies.

The coalition argues CIPA, a 1967 law originally intended to prevent illegal wiretapping and eavesdropping, was never meant to regulate modern internet activity.

“If you think about what technology was in 1967, there wasn’t online activity,” one coalition advocate said during a May 1 interview. “It was really meant to focus on wiretapping.”

Supporters say SB 690 would make clear that complaints involving website tracking tools, cookies and similar online technology should be handled under the California Consumer Privacy Act, or CCPA, instead of CIPA. They argue the CCPA already has rules governing how businesses collect consumer data and provides protections for users. Additionally, the bill would shield businesses and organizations from penalties under CIPA when collecting certain information for normal business operations.

Advocates also say the change would keep CIPA focused on what it was originally designed to address, such as wiretapping and eavesdropping, while online privacy issues would continue to be regulated under the CCPA.

The bill, first introduced in 2025 with bipartisan support, is awaiting consideration by the Assembly Privacy and Consumer Protection Committee and is expected to be heard this month.

It previously passed through the state Senate but faced opposition from groups that raised concerns the bill could allow companies to collect sensitive data that may later be bought and sold to third parties.

However, Gutierrez said the way the law is currently being applied is forcing small business owners to spend money that could otherwise be used to pay employees or cover operating expenses. She said the lawsuit against her business initially sought about $20,000.

 

Belinda Gutierrez, owner of Elk Grove Plumbing, Drain, Heating and Air, spoke with the Elk Grove Citizen on May 1 about what Senate Bill 690 advocates call a legal loophole that has led businesses, nonprofits and public agencies across the state to face costly lawsuits tied to the 1967 California Invasion of Privacy Act.

“They’re demanding, I believe, $5,000 per violation,” she said.

Gutierrez added that the legal pressure places businesses in a difficult position because fighting the case in court could cost more than settling.

“It’s going to cost me 20 to fight it, or it’s going to cost me 15 to settle. I’m just going to settle,” Gutierrez said. “They’re pricing it in a way that makes businesses not want to fight it.”

Coalition members supporting SB 690 estimate that more than 3,000 businesses and organizations across California have faced similar lawsuits or demand letters in recent years.

Those targeted, they say, include food banks, hospitals, school districts and local nonprofits in addition to small businesses.

“It’s not just businesses,” Gutierrez said. “It could be your office. It could be the chamber. It could be a nonprofit. Anybody that has a website.”

The coalition contends lawsuit filings have surged since 2022, with some law firms allegedly using automated searches to identify websites lacking certain privacy disclosures. Advocates also note that businesses have sometimes faced additional lawsuits from different firms even after settling previous claims.

“The thing, too, is she (Gutierrez) can settle tomorrow,” the coalition representative said. “Another law firm will come and ask her for a demand letter.”

Gutierrez said one of the most important steps in combating the lawsuits is encouraging affected business owners and organizations to speak publicly about their experiences and support legislative reform. She said even those who have not been targeted should pay attention because they could face similar claims in the future.

“We need more businesses that are being affected, all hands on deck, just to talk about it,” Gutierrez said. “Until somebody hears it from someone that’s actually being sued, they really won’t understand.”

The lawsuits, Gutierrez emphasized, are draining money away from local services, jobs and community programs.

“The Sacramento Food Bank has been sued,” Gutierrez said. “Instead of cutting $20,000 to feed people in need, it’s all going into legal issues or demand letters.”

“It’s already hard to do business in California,” she added. “This is just another thing to add on that people really just can’t afford right now.”

Support for SB 690 was on full display May 12 at the State Capitol, where Gutierrez joined other business owners in an advocacy rally for the legislation alongside Caballero. Coalition organizers are still encouraging affected businesses and organizations to join the effort by supporting SB 690 and sharing their experiences publicly ahead of upcoming legislative hearings. Learn more at StopCIPAShakedowns.com.