California's Judicial Hellhole® : Where Innovation Meets Litigation

California’s Judicial Hellhole® Status: Where Innovation Meets Litigation

Press Releases | December 10, 2024

Lawsuit Abuse Costs Every Californian $2,300 Annually, Kills 825,000 Jobs

California failed to escape its “Judicial Hellhole®” reputation this year, ranked No. 5 in the 2024-2025 report spotlighting the nation’s worst civil justice systems released today by the American Tort Reform Foundation.

“California’s legal system continues to be the trial bar’s laboratory for innovative liability theories, burdening businesses and ultimately hurting consumers,” American Tort Reform Association president Tiger Joyce said. “It’s not just legal jargon for lawyers in courtrooms – lawsuit abuse drives up the cost of everyday essentials for hard-working Californians, from groceries to gas.”

Data reveals that Californians pay the third-highest “tort tax” in the nation – nearly $2,300 per person each year. Meanwhile, the state loses more than 825,000 jobs each year due to excessive tort costs.

ATRF’s report calls out myriad abuses in California’s legal system, noting one decision by the California Court of Appeal in particular that dramatically expanded product liability this year. The Gilead Tenofovir decision imposed a new duty to innovate on manufacturers. It 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. The California Supreme Court agreed to review the decision.

“The Gilead decision is a prime example of judicial overreach, creating liability for companies even when their products are not defective or dangerous,” Joyce said. “This new ‘duty to innovate’ could force companies to rush potentially unsafe products to market, prioritizing speed over safety and thorough testing. We urge the California Supreme Court to reject this dangerous theory and prevent further abuse of the state’s legal system.”

ATRF highlighted several other new issues in California’s legal system this year, including:

Prop 65 and ADA Abuse: Claims under California’s initially well-intentioned Proposition 65 are set to exceed the already excessive number of claims in past years, with 4,118 notices filed as of October 1. In 2023, California hosted nearly 30% of the nation’s lawsuits filed under the Americans with Disabilities Act, with 2,380 accessibility lawsuits filed. Trending toward a significant increase in ADA filings for 2024, 1,588 claims were filed in the first half of the year.
Junk Science: Trial lawyers used California federal courts to test junk science evidence in a new series of lawsuits over alleged benzene in acne products. The cases relied on research from a lab, Valisure, whose testing methods have been scrutinized and thrown out of other federal courts.

Environmental Litigation: The state attorney general is suing plastic producers, seeking to hold them responsible for environmental cleanup and recycling costs. The AG is also suing energy companies attempting to hold them financially responsible for climate change-related costs. Meanwhile, the City of Santa Monica is suing more than one dozen companies for PFAS contamination, with a handful of allegations including design defect and public nuisance.

“California has always been a hub for innovation and entrepreneurship, but excessive litigation stifles business growth and prevents job creation,” Joyce said. “These lawsuits burden small businesses without improving accessibility or consumer safety. Regardless of age or political affiliation, the negative effects of lawsuit abuse are evident. It’s time for common-sense reforms to address excessive litigation and lawsuit abuse in California.”

Further compounding concerns, California’s legislature was placed on ATRA’s “Heat Watch” list in its inaugural “Legislative HeatCheck” report this year.

The full Judicial Hellholes® report and 2024-2025 rankings are available at JudicialHellholes.org.