The American Tort Reform Foundation has released its annual Judicial Hellholes Report and California has claimed the #2 ranking on the report between Philadelphia and West Virginia. Our state certainly has been racking up the distinctions this year.
Last year we were also ranked #2 due to consumer class actions, extortionate disability access claims against small business, and expansive liability. Two cases stood out last year: a $208.8 million verdict for a single asbestos claimant in Los Angeles and a $677 million class action verdict leveled by a Humboldt County court against a nursing home provider in a case where not a single person had been injured.
In the 2011/12 Judicial Hellholes report, California maintains its #2 ranking. In the past the report has primarily focused on places where judges systematically apply laws and court procedures in an unfair and unbalanced manner, generally against defendants in civil lawsuits. More recently, the plaintiffs’ attorneys has begun aggressively lobbying legislative and regulatory bodies to expand liability as well. This year’s Judicial Hellholes report therefore includes regulatory and legislative actions (or lack thereof), which can affect the fairness of a state's legal climate as readily as judicial actions.
The report’s section on California kicks off by citing recent surveys of chief executives in which California was named the very worst state to do business. “Perhaps no other state more clearly illustrates the direct impact of excessive litigation on job creation and the ability of businesses to survive and thrive,” the report states.
The report then examines the ongoing rash of ADA lawsuits filed by a cadre of personal injury lawyers against small business owners. These lawsuits often target business owners who speak English as a second language or otherwise lack understanding of their legal rights.
The report also discusses California’s out-of-control class action laws, how the courts are chipping away at legal reforms approved by voters through Proposition 64 and California hosting the first Wal-Mart class action case. California, the report concludes, seems to be controlled by the trial lawyers at the judicial, regulatory and legislative levels.
CALA has pointed out numerous times over the years that all of these factors dissuade investment in California. If the legal climate is not business-friendly, investors will simply go to other states. The latest Judicial Hellhole Report is just one more message to California’s legislative, regulatory and judicial leaders that we need legal reform more than ever.