(The Center Square) – California was ranked the nation’s fifth-worst “judicial hellhole” this year, improving from its third-place ranking last year by the American Tort Reform Foundation, a tort reform nonprofit funded by major American corporations.
ATRF’s annual “judicial hellholes” report highlights the nation’s ten-worst legal jurisdictions when it comes to liability cases, such as “allowing innovative lawsuits to proceed,” “welcoming litigation tourism,” and an eagerness to “expand civil liability at every given opportunity.”
Citing research from The Perryman Group, ATFR says the cost of excessive litigation adds $2,297 to the cost of living for each Californian per year — or $89.7 billion as a whole — and the state’s employment is 825,475 jobs lower than it should be due to the cost of excessive litigation.
Consumer Attorneys of California, an organization of lawyers that represent plaintiffs in liability cases in California, did not respond to a request for comment.
AFTR says California is the top producer of so-called “nuclear verdicts” over $10 million, often for personal injury suits, and one of the ten-largest on a per-capita basis, and creates “new ways to sue.”
One “new way to sue” is a new “duty to innovate,” based on a California state court ruling that “found that even if a product is not defective or unreasonably dangerous, a company can be held liable if it was researching and developing another product that it “knew” was “safer” and did not release that product fast enough.”
Another example is the Private Attorney Generals Act, which allows employees to file lawsuits to recover civil penalties on behalf of the state for labor code violations. This measure was just reformed to allow employees to recover 35%, not just 25%, of the money won — a third or more goes to the plaintiff’s lawyers, while the rest goes to the state’s Labor and Workforce Development Agency.
Additional PAGA reforms signed into law by California Gov. Gavin Newsom included capping damages on companies that quickly respond and adapt to plaintiffs’ complaints, while increasing damages for repeat, malicious offenders, in part leading to ATRF’s improved rating for California this year.
“A deal forged this year reformed the state’s horrendously bad anti-employer law, the 20-year-old Private Attorneys General Act, but it took the threat of a ballot initiative, the Fair Pay and Employers Accountability Act, to bring some of the reluctant parties to the table. Given the outcome of a ballot measure such as Proposition 36, which showed people fed up with a lot of California’s current system, it was probably wise for the much-too-powerful attorneys’ lobby in this state to bargain rather than block. Still, we can’t claim to be out of the lawsuit woods yet.”
ATRF also pointed to “serial plaintiffs” in for complaints about Proposition 65, which requires a label to be placed on products that contain any traces of more than 1,000 chemicals deemed by the state to be carcinogenic or toxic, with 85% of settlements going to attorneys’ fees and costs.
Serial plaintiffs for Americans with Disabilities Act cases also remain an issue; one California plaintiff, Chris Langer, has filed nearly 2,000 ADA lawsuits over the past 30 years.
While ATRF is supported by some of the world’s largest corporations, small businesses also carry their share of liability lawsuits; Langer famously, as ATRF reports, filed a against a San Diego lobster shop, a smoke shop, and the mom-and-pop owners of the building the stores were in all in one day.
“A deal forged this year reformed the state’s horrendously bad anti-employer law, the 20-year-old Private Attorneys General Act, but it took the threat of a ballot initiative, the Fair Pay and Employers Accountability Act, to bring some of the reluctant parties to the table,” said California Director John Kabateck of the National Federation of Independent Business, which represents small businesses, in response to the report.
“Given the outcome of a ballot measure such as Proposition 36, which showed people fed up with a lot of California’s current system, it was probably wise for the much-too-powerful attorneys’ lobby in this state to bargain rather than block,” continued Kabateck. “Still, we can’t claim to be out of the lawsuit woods yet.”
