(The Center Square) – According to a new report from the American Tort Reform Association, California is the third-worst “judicial hellhole” in the U.S. due to “novel theories of liability” that drive economic losses of nearly $100 billion and one million jobs per year.
“The ‘Golden State’ is the plaintiffs’ bar’s laboratory for finding innovative new ways to expand liability through both the courts and legislature,” wrote ATRA. “These novel theories of liability are burdening small businesses and bogging down the state’s economy. Even in areas where the U.S. Supreme Court has stepped in to rein in lawsuit abuse, the California Supreme Court has disregarded precedent and expanded liability.”
California has consistently ranked in one of the top three worst “judicial hellholes” in the nation, coming in at number one for 2021 and number three for 2022 and 2023.
“From abusive Proposition 65 and Private Attorneys General Act (PAGA) litigation, to serial plaintiffs filing hundreds of lawsuits under the Americans with Disabilities Act, the list of issues with the state’s civil justice system is endless,” continued the report.
The report also cites an analysis from The Perryman Group finding the state’s tort system induces economic losses of $83.16 billion, or $2,119.15 per Californian, and 787,490 jobs each year.
“A flawed civil justice system which generates exorbitant levels of damages or numbers of awards and which is unpredictable in its outcomes may result in negative impacts through the misallocation of society’s scarce economic and human resources,” wrote The Perryman Group. “When such imbalances occur, tort reform can lead to substantial economic benefits, and states which have implemented reforms have seen improved judicial efficiency and measurable improvement in economic performance.”
Examples from ATRA include the decade-spanning doubling of filings related to Proposition 65, a rule requiring businesses to place warnings if a product has any trace of more than 1,000 chemicals state regulators deemed carcinogenic or toxic, and no-injury lawsuits against businesses under the Private Attorneys General Act, which allows employees to file lawsuits on behalf of themselves and other employees for labor code violations. The report also cites an example of the Center for Disability Access filing over 4,000 claims from 2010 to 2021, amounting to roughly one claim per day for 11 years straight, by making use of serial plaintiffs In these cases, the CDA would demand between $10,000 and $20,000 to settle. Because many of these mom-and-pop business owners spoke English as a second language, and the costs of even a successful case would cost $50,000 or more to bring the case to trial, these businesses tend to settle, raking in tens of millions for attorneys while driving small businesses into insolvency.
