The American Tort Reform Association (ATRA) has placed California on its “Heat Watch” list in the new Legislative HeatCheck report, citing an increase in legislation that could expand liability within the state.
“While California’s work on reforming the Private Attorneys General Act this year is encouraging, we’re still seeing more negative than positive legislation that could impact the state’s legal climate,” said Tiger Joyce, ATRA president. “The trial lawyer lobby remains highly influential, pushing an aggressive slate of liability-expanding bills that threaten to further burden businesses and consumers.”
A notable achievement this session was a deal negotiated to reform the Private Attorneys General Act (PAGA), which has been criticized for enabling lawsuits against employers. The compromise limits fines for employers who attempt to rectify violations and requires plaintiffs to have experienced the violation themselves, aiming to prevent no-injury lawsuits under PAGA.
“We are grateful that lawmakers, Gov. Newsom and stakeholders came to the table to enact positive changes to the state’s problematic Private Attorneys General Act,” Joyce said. “However, this single reform doesn’t erase California’s long-standing reputation as a ‘Judicial Hellhole.’ The legislature is still entertaining numerous liability-expanding bills that could undo this progress and further burden small businesses and consumers alike.”
ATRA's report highlights twelve pieces of legislation that could further expand liability in California and complicate business operations. Conversely, some legislation aimed at reducing lawsuit abuse did not pass.
California consistently ranks among the nation’s worst “Judicial Hellholes®,” currently positioned at No. 4. Excessive tort costs impose a $2,298 annual “tort tax” on residents while costing over 825,000 jobs each year.
The trial bar’s influence is reflected in its political spending. Since 2017, the top 20 plaintiffs’ firm campaign contributors have invested more than $15.4 million into California political campaigns. Over 43% of these funds went to committees associated with trial lawyer advocacy groups, with nearly $2 million directed towards Gov. Newsom.
“With California’s penchant for entertaining legislation that breeds lawsuit abuse, we’ll continue to monitor the statehouse through the end of session,” Joyce said. “ATRA stands ready to sound the alarm on any bills that could make the state’s already-poor legal climate even worse.”
ATRA’s Legislative HeatCheck report evaluates select states' progress in enacting meaningful tort reform measures during their most recent legislative sessions.
California joins Michigan and New Jersey on ATRA's "Heat Watch" list. The full Legislative HeatCheck report is available at heatcheck.atra.org.
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