California’s litigation climate remains one of the worst in the country. The state came in second in this year’s “Judicial Hellholes” report by the American Tort Reform Foundation.
California has topped the list for three of the past five years, coming in second the rest of the time, being dethroned only due to exceptional corruption in New York City’s asbestos courts in 2014 and this year by St. Louis courts for their lax approach to junk science.
“Ranked second this year is perennial hellhole California, where lawmakers, prosecutors and plaintiff-friendly judges inexorably expand civil liability and thus invite the nearly 1 million new lawsuits filed there each year,” explained ATRF president Tiger Joyce. “Of course, the politically influential personal injury bar is enriched by such litigiousness, even as tightened state budgets make it increasingly difficult for state courts to keep up with the volume.”
The report notes that since 2010, the state has approved an average of 827 new laws every year, approving 893 new laws in 2016. While at least one of these laws is helpful — Senate Bill 269, which gives small business owners a chance to fix technical violations of the Americans with Disabilities Act before being subject to penalties or lawsuits, was signed into law in May — many more laws will only aggravate the state’s reputation for encouraging lawsuits, including new environmental laws and regulations.
As a state that routinely welcomed out-of-state plaintiffs and lawsuits over any minor issue, this tendency to enact increasing numbers of laws results in a clogged court system and dissuades many businesses from opening shop in California.
The report cites, for example, a class action lawsuit over complaints that “evaporated cane sugar” on soda labels is actually sugar. “Had they known ‘evaporated cane juice’ was the same thing as added sugar or syrup, Plaintiffs would not have purchased Defendant’s food products,” the court filing explained.
Fortunately, there are some glimmers of reason. In August, U.S. District Court Judge Percy Anderson of the Central District of California dismissed a lawsuit alleging Starbucks “systematically defrauds its customers by advertising its cold drinks as containing more liquid than they do by ‘underfilling’ its cups with liquid and then adding ice to make the cups appear full.”
Naturally, the report notes the litany of unintended consequences stemming from the California Environmental Quality Act, which is routinely invoked by NIMBYs to “bludgeon” projects they don’t agree with or which are perceived threats to wealthy plaintiffs’ property values or business interests. Targets of CEQA lawsuits are often taxpayer-funded projects, while housing developments are the most targeted privately funded target.
According to a study by law firm Holland & Knight, most plaintiffs in CEQA cases have no track record of environmental advocacy prior to filing their lawsuits, with only 13 percent of CEQA petitioners being recognized state and national environmental groups.
Ending on a positive note, the ATRF report celebrated the April federal court ruling blocking Attorney General Kamala Harris’ demand that the Americans For Prosperity Foundation disclose the names of its donors, noting that such a requirement would have a chilling effect on free speech.
Alas, it’s a difficult state of affairs in California, one that will need to be continually challenged for the sake of common sense and economic competitiveness.