Our state once again wins the hellhole prize
California has done it again. The state has once again topped the American Tort Reform Foundation’s annual Judicial Hellholes rankings, “thanks to its relentless pursuit of liability-expanding principles.”
Everyone can agree that the civil justice system is important for holding people and organizations accountable for harms outside of the scope of the criminal justice system.
However, the Golden State has long had a reputation as one where it’s far too easy to file all lawsuits and way too easy to get away with filing obviously frivolous and abusive suits.
According to the Judicial Hellholes report, Proposition 65 is a favorite tool for the litigious to take advantage of.
“Under Prop. 65, businesses are required to place ominous warning signs on products when tests reveal the presence of even the slightest, nonthreatening trace of more than 1,000 listed chemicals that state environmental regulators deem carcinogenic or otherwise toxic,” the report notes. “Failure to comply can cost up to $2,500 per day in fines, and settlements can cost $60,000 to $80,000.”
The incentives, then, are there for those willing and able to take matters to court in order to force lucrative settlements regardless of whether harm was done. Notably, from 2019 to 2020, the number of Prop. 65 pre-litigation notices provided to the state’s food and beverage industry spiked from 534 to 1,546.
Then there’s California’s status as the leading state for Americans with Disabilities
Act lawsuits. While ADA lawsuit filings dropped nationwide in 2020 from the prior year to 10,982, California saw a 22% increase in such lawsuits, with 5,869 ADA lawsuits.
While such lawsuits declined during 2021, likely due to the pandemic, most ADA lawsuit filings in the country continue to happen here. Part of the reason is that California imposes a $4,000 fine per violation, while most states lack such fines.
Meanwhile, “California once again challenged New York for the most ‘no-injury’ consumer class actions targeting the food and beverage industry,” with 58 class action filings.
The report cites one positive development on this front, though. Over the summer, Ninth Circuit turned down a settlement in a class action lawsuit filed over a cooking product by Wesson Oil over its claim to be “100% natural.”
The report notes the settlement would’ve awarded $1 million to be distributed to 15 million consumers, while $5.85 would’ve gone to the attorneys. “In fact, the settlement was premised on the … ‘virtually worthless’ achievement of getting a food maker to agree to stop using labeling on a product it no longer owned,” the report notes.
But, of course, for every breakthrough of common sense, there are many more where that doesn’t happen.
The practical consequence of California’s litigious environment is significant.
The lawsuit cites a study by John Dunham and Associates estimating that, “California residents pay a ‘tort tax’ of $574 per person” and that over 200,000 jobs are lost per year as a result.
California should seek a balance between its punitive civil justice system and moderate ones that most other states have. The point of the civil justice system is to help people find justice and hold wrongdoers accountable. California unfortunately largely seems to operate under the view that the point of the system is just to make attorneys a lot of money.