Victor Gomez
The California Legislature has been placed on the American Tort Reform Association’s “Heat Watch” list for its inaction on tort reform and for considering bills that could worsen the legal climate in the state.
The designation is part of the ATRA’s annual “HeatCheck” assessment to determine which states are making progress in passing legal reform measures and the states that are failing to do so. California, which is a regular on ATRA’s annual ranking of Judicial Hellholes, was placed on the Heat Watch list this year along with the statehouses in Michigan and Ohio.
“There are several common-sense reforms before the (California) Legislature that could help provide some relief for small businesses who face abusive lawsuits, and we hope they’ll be taken up again in the future,” the ATRA’s president, Tiger Joyce, said in a statement.
Victor Gomez, executive director of California Citizens Against Lawsuit Abuse, said he wasn’t surprised by the Legislature’s appearance on the Heat Watch list for a second year in a row.
“The Legislature, unfortunately, has proved time and time again that when it comes to creating this litigious climate … they’re not looking to limit it but to expand it,” Gomez told the Southern California Record.
Lawmakers did consider several civil-justice bills that would have had a positive effect on California’s legal climate, he said, but ultimately they failed to advance. Among them was Senate Bill 84, which passed the lower house with bipartisan support but was sidelined in the Senate by Judiciary Committee Chairman Ash Kalra (D-San Jose).
SB 84 would have given small businesses a 120-day window to fix issues involving the Americans With Disabilities Act (ADA) and California’s Unruh Civil Rights Act before having to face litigation. Another bill, SB 690, aimed to stop “shakedown lawsuits” brought under the state’s Consumer Protection Privacy Act, according to the ATRA. And Assembly Bill 743 sought to regulate third-party litigation financing contracts and require those who put up such funds to file a $250,000 surety bond.
Other California bills that have been under consideration would make the legal climate worse by restricting the use of arbitration contracts and inflating the calculation of damages awards for survivors, the ATRA said.
Gomez said the state’s small businesses continue to face multiple issues stemming from excessive litigation.
“We continue to be a testing ground for innovative liability theories,” he said, adding that product-liability lawsuits and litigation resulting from Proposition 65 labeling requirements and the ADA continue to be burdens on businesses.
In addition, reforms negotiated by Gov. Gavin Newsom and state lawmakers last year to reduce litigation resulting from the 2004 Private Attorneys General Act (PAGA) have yet to provide relief for small businesses, which are often sued under the law’s provisions for minor employment law violations, Gomez said.
“I really do hope they (lawmakers) get serious about affordability, job growth and about fairness in the courts,” Gomez said, indicating that California continues to be one of the most expensive places to live and that a family of four now pays nearly $10,000 annually in costs associated with excessive litigation.
Trial attorneys have spent nearly $20 million in recent years on campaign contributions, he said, but Gomez added that there are people in both parties who are concerned about the legal climate’s impact on small businesses.
“There are people in Sacramento willing to fight the tough fight, and we’re grateful to them,” he said.
