California’s reputation as a proving ground for new theories of liability, its massive jury verdicts exceeding $10 million and its pushing the envelope of environmental litigation have all helped to put the state in the No. 5 spot on the new Judicial Hellholes report released this week.
The 2024-2025 report from the American Tort Reform Association (ATRA) said the Golden State had the most nuclear verdicts of any state in cases involving personal injury and wrongful death between the years 2013 and 2022. California was also faulted for hosting an onslaught of “junk science” litigation that accused defendants Walgreens, Kenvue and Johnson & Johnson of marketing acne products that contain excessive amounts of benzene and failing to warn consumers of the risk, according to the report.
The problem with this argument is that plaintiffs say current evidence suggests the benzene is produced when the medication is stored at temperatures of 98.6 degrees Fahrenheit, 122 degrees and 158 degrees – which are all above the typical temperature of consumers’ homes, the report says.
“California has always been a hub for innovation and entrepreneurship, but excessive litigation stifles business growth and prevents job creation,” Tiger Joyce, the ATRA president, said in a prepared statement. “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.”
Victor Gomez, executive director of California Citizens Against Lawsuit Abuse (CALA), said the root cause of many of the state’s legal abuses involves how plaintiffs’ law firms spend heavily on elected officials’ political campaigns.
“As you can see in the report, since 2017, these firms have contributed more than $15 million to state candidates, including more than $2 million to the governor,” Gomez told the Southern California Record in an email. “Trial attorneys know that this sets up the foundation for these politicians to turn their attention to other issues, not those that benefit the trial bar.”
Gomez, a former pizza shop owner, said small businesses cannot match the monetary influence of trial attorneys in the state. But even so, California CALA will continue to push for reforms in the areas of Americans With Disabilities Act (ADA) lawsuits, Proposition 65 litigation and undue business burdens related to the Private Attorneys General Act (PAGA), which the ATRA report labels the “Sue Your Boss” law.
“We are hopeful that like (Senate Bill) 585 a few years ago, we can push for legislative reforms that will help businesses avoid frivolous ADA lawsuits by providing a ‘fix’ instead of a lawsuit,” he said.
SB 585, which passed the state Senate last year, calls for businesses to be notified of alleged ADA violations prior to the filing of lawsuits, would limit damages and attorney fees, and would impose a 120-day cure period so businesses accused of violations can provide corrective action.
In the first half of this year, California recorded 1,588 federal ADA lawsuits, the highest number of any state in the nation, the report states.
Kyla Christoffersen Powell, CEO and president of the Civil Justice Association of California (CJAC), said her group would continue fighting for a fair and balanced civil justice system.
“The American Tort Reform Association has released its annual list of ‘Judicial Hellholes,’ and California earned its place for the 19th year in a row, landing at No. 5,” Powell told the Record in an email. “Our perpetually hostile legal environment costs businesses billions of dollars each year. Meanwhile, the state loses more than 825,000 jobs each year due to excessive tort costs.”
Excessive litigation in California also condemns residents to pay the third largest “tort tax” in the U.S. at nearly $2,300 annually, she said.
“Statewide lawsuit abuse impedes access to justice by clogging our courts,” Powell said. “The impacts of the abuse cut across political lines, affecting all Californians regardless of political affiliation.”
The ATRA report, however, did note that Gov. Gavin Newsom signed a pair of bills this year designed to address complaints about PAGA lawsuits. Those bills aimed to ensure that truly harmed employees received larger claim allocations, to lower PAGA penalties for employers and to reduce penalties for employers who take “reasonable steps” to correct problems in PAGA notices.
“While the legislature should be applauded for taking steps to address PAGA abuses, there is cautious optimism as to whether these changes will sufficiently address the problem,” the report says.