ATRA Puts California on 'Heat Watch' in New Legislative Report

ATRA Puts California on ‘Heat Watch’ in New Legislative Report

Press Releases | July 31, 2024

Trial Lawyers’ Influence Keeps California on ATRA’s Radar

Today, the American Tort Reform Association placed California on its “Heat Watch” list in the new Legislative HeatCheck report, citing an onslaught of legislation with the potential to further expand liability in the Golden 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,” Tiger Joyce, ATRA president said. “The trial lawyer lobby remains highly influential, pushing an aggressive slate of liability-expanding bills that threaten to further burden businesses and consumers.”

ATRA notes a bright spot this session was a deal negotiated to reform the Private Attorneys General Act, long criticized for enabling shakedown lawsuits against employers. The compromise limits how much an employer can be fined if they try to fix a potential violation and requires those filing lawsuits under PAGA to have experienced the violation themselves, helping to prevent no-injury lawsuits under the law.

“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 one dozen pieces of legislation that could further expand liability in the state and make it more difficult to own and operate a small business in California. Conversely, the Association point out that some legislation aimed at reducing lawsuit abuse failed to pass.

California consistently ranks among the nation’s worst “Judicial Hellholes®,” currently sitting at No. 4. Excessive tort costs impose a staggering $2,298 “tort tax” on California residents annually while sapping more than 825,000 jobs from the state’s economy each year.

The trial bar’s outsized influence is evident in its political spending. Since 2017, the Top 20 plaintiffs’ firm campaign contributors poured more than $15.4 million into California political campaigns. More than 43% went to political committees associated with trial lawyer advocacy groups, while Gov. Newsom received nearly $2 million.

“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 a select group of states’ progress — or lack thereof — in enacting meaningful tort reform measures during their most recent legislative sessions.

California’s legislature is named to the “Heat Watch” list alongside both the Michigan and New Jersey statehouses. The full Legislative HeatCheck report is available at heatcheck.atra.org.