Consumer Action for a Strong Economy (CASE), a nonprofit organization advocating for consumer interests, has declared that all Americans are shouldering the costs of mass tort litigation while attorneys reap the benefits. In California, millions of residents, particularly those in low-income households, are grappling with affording basic necessities.
In an opinion piece penned by Gerard Scimeca, an attorney and co-founder of CASE, for the DC Journal on Feb. 13, he argued that excessive tort costs result in nearly $473 billion in economic output loss annually. "We all foot the bill for this 'tort tax' while opportunistic attorneys and hedge fund managers rake in huge profits," said Scimeca. He stated that the surge in mass torts or class action lawsuits is propelled by "mega-law firms" and third-party financiers who profit from these lawsuits.
Scimeca noted that these law firms invest heavily in advertising to attract potential claimants. "The more people they sign up, regardless of whether those individuals have a valid grievance, the better their chances of gaining a lucrative judgment or, more likely, an enormously profitable settlement," he wrote. Furthermore, many mass tort cases are financed by private equity firms or hedge funds who receive a portion of the profits. According to Scimeca, states such as Florida and Kansas have implemented reforms to prevent legal system abuse. "Every state should look hard at what excessive mass tort legislation is costing them — and all of us — and act accordingly," he urged.
A report from the California Budget and Policy Center discovered that Californians with the lowest incomes are most impacted by inflation and escalating costs. Among California households earning less than $35,000 annually, over 60% reported struggling to meet basic expenses like food and shelter. Additionally, 46% of households earning between $35,000 and $74,999 also reported difficulties affording basic necessities. Moreover, 54% of black California households reported financial hardship in covering essentials.
According to the organization's website, Scimeca serves as the chairman and general counsel of CASE. The organization strives to promote free market principles in support of consumer interests. Its aim is to engage with the public and lawmakers about pro-consumer policies.