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CA Named #1 Judicial Hellhole

Tom Scott
Executive Director, California Citizens Against Lawsuit Abuse

It just would not be right for California to finish off 2012 without one more designation as being the worst at something. Our state seems to receive several of these each year: one of the worst legal climates, the state with the worst government, the worst place to do business, and now, we are the #1 “Judicial Hellhole” in the nation.

The American Tort Reform Association (ATRA) released its annual list of “Judicial Hellholes” – places where frivolous lawsuits thrive and courts produce uneven rulings that often favor plaintiffs – and California earned the #1 slot.

Some of the reasons California earned the top spot are as follows:

1. Absurd Consumer Class Actions: California courts have embraced many of the nation’s most absurd consumer class action lawsuits. In the past few years, ridiculous consumer class action lawsuits have been filed in California against the makers of NutellaFrosted Mini-WheatsNature Valley Granola Bars and McDonald’s Happy Meals. The lawsuit against Nutella, for instance, alleges that its maker advertised it as a way to get kids to eat healthy food, when in fact Nutella has a high amount of sugar. Lawsuits such as these are brazen money grabs, not legitimate uses of our legal system’s scarce resources.

2. Americans with Disabilities Act (ADA) Access Exploitation: Despite the passage and signing into law of SB 1186, shakedown lawsuits alleging ADA violations against businesses have continued. It will take time to see if SB 1186 can actually reduce these lawsuits. There is hope that U.S. Senator Dianne Feinstein will introduce federal legislation to tackle this ongoing issue, but it remains a major problem in California.

3. Questionable Unintended Acceleration Cases: Lawyers involved in all types of litigation have taken notice of California’s plaintiff-friendly courts and are flocking to the state to file their lawsuits. Cases alleging sudden, unintended acceleration of Toyota vehicles have popped up in Los Angeles and Santa Ana.

4. Asbestos Lawsuits Overburdening the Legal System: Certain California courts have served as a magnet for asbestos lawsuits. The Superior Courts of Alameda, Los Angeles and San Francisco attract nearly all of the asbestos filings in California.

5. Continued Attacks against MICRA: The Medical Injury Compensation Reform Act (MICRA) has been in place since 1975, and places reasonable limits on damages for pain and suffering in medical malpractice lawsuits cases. The trial lawyer lobby is continuously trying to attack this law, and its repeal remains one of its primary objectives.

6. Phantom Damages Legislation – In 2012, State Senate President pro tem Darrell Steinberg introduced SB 1528 in an effort to overturn a 2011 California Supreme Court ruling that required courts to base damages awards for medical expenses on the amounts plaintiffs or their insurers actually paid for treatment, instead of the amount initially billed, which is never paid by anyone. This was a high priority for the trial lawyers, and while it did not pass in 2012, we expect to see it come back from the grave in 2013.

7. Cuts in the Courts: California courts have faced devastating cuts over the past five years. Nearly $1.2 billion has been cut from the system and another $200 million cut is being considered. The courts interpret the laws passed in this state. This is bordering on a crisis and it needs to be seriously addressed.

As you can see, there are many reasons California was given the dubious title of #1 “judicial hellhole.” That is not to say there haven’t been some successes this past year in the area of legal reform. Specifically, the passage of SB 1186, which helps stop abusive ADA lawsuits, and the vetoing of AB 2346, which would have created a new way to sue about agricultural working conditions, were points of light. Overall, though, the legal climate in California is in a sad state of affairs.

This situation deters businesses from investing and creating jobs in our state, and minor tweaks are not going to be enough to turn this around.  It will take time, and CALA hopes that pragmatic voices will prevail in making our legal climate the reason business locate in California, not leave it.

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