California once again ranks near the bottom of the American Tort Reform Foundation’s (ATRF) annual ranking of “Judicial Hellholes,” which evaluates local court actions and state civil justice systems.
The state has continued to pass laws and add regulations that target businesses, Maryann Marino, Southern California regional director of California Citizens Against Lawsuit Abuse (CALA), told the Northern California Record.
“It means mom and pop shops get set up for abusive litigation and need relief from shakedown lawsuits,” Marino said.
Twenty-one states have passed liability protections for businesses amid the COVID-19 pandemic, however not California. The Senate Judiciary Committee last week declined to take up AB 1035, a bill that would have granted small businesses (with 25 or fewer employees) immunity from civil liability during the COVID-19 emergency.
A Yelp Economic Impact Report from September shows nearly 20,000 businesses have permanently closed in California, the most of any state in the country. An additional 20,000 are temporarily closed.
California’s excessive tort costs lead to an annual estimated $15.1 billion lost in direct costs, nearly 250,000 lost jobs, and amounts to every Californian paying a nearly $600 “tort tax,” the report states.
The legislature needs to act to pass meaningful reform, Marino said.
“If they would just pass a law or two that would reduce the number of technical issues and provide a right to cure before a lawsuit could be filed, it would go a long way toward helping our job creators and innovators,” Marino said. “Despite what legislators always say about California having the fifth largest economy in the world, then why are all these businesses leaving?”
Even though California is named to the Judicial Hellholes list year after year, lawmakers don’t seem to get the hint, resulting in poorly thought out policies with unintended consequences, American Tort Reform Association (ATRA) President Tiger Joyce said in a statement.
“Nearly every time California passes a bill they think will help workers, it has the complete opposite effect,” Joyce said. “California workers are left with forced stringency in the workplace, if they are able to work at all. The overall climate of lawsuit abuse drives employers out-of-state or out of business and leads to lost jobs.”