Wisner Baum, a prominent mass tort law firm based in California, has withdrawn its legal challenge against the state’s prohibition on fee-sharing with out-of-state firms owned by non-lawyers. The firm filed a notice of voluntary dismissal in the U.S. District Court for the Central District of California on Thursday, ending the litigation initiated in late November. ([news.bloomberglaw.com](https://news.bloomberglaw.com/daily-labor-report/mass-tort-firm-abandons-suit-against-california-fee-sharing-ban?utm_source=openai))
The lawsuit contested Assembly Bill 931, enacted in October 2025, which restricts California attorneys from sharing contingency fees with “alternative business structures” (ABS)—law firms owned by non-lawyers in other states. This legislation was a response to Arizona’s 2021 decision to permit non-lawyer ownership of law firms, a move that attracted various investors into the legal sector. ([news.bloomberglaw.com](https://news.bloomberglaw.com/litigation-finance/california-bans-contingent-fee-sharing-with-alternative-firms?utm_source=openai))
Brent Wisner, managing partner at Wisner Baum, argued that the law infringed upon constitutional rights by limiting commercial speech and impeding interstate commerce. The firm had established Eleos Law in Arizona, an ABS designed to handle client services and marketing, while Wisner Baum managed litigation. Eleos Law was funded through a percentage of attorneys’ fees from Wisner Baum’s cases, including thousands of lawsuits related to Zantac and alleged contamination in baby food. ([realnewshub.com](https://www.realnewshub.com/mass-tort-attorney-sues-to-block-california-fee-sharing-law/?utm_source=openai))
The voluntary dismissal leaves Assembly Bill 931 unchallenged, maintaining the ban on fee-sharing between California attorneys and out-of-state ABS firms. This development underscores the ongoing tension between traditional legal practice regulations and emerging business models in the legal industry.