Californians need tort reform now

OPINION – California is known for its dynamic economy, constant innovation, and entrepreneurial leaders — from small businesses to global brands. However, undermining this success is the state’s skyrocketing cost of living.

A significant factor driving California’s affordability crisis is the explosion of frivolous lawsuits. While California only makes up 11 percent of the U.S. population, our state hosted 30 percent of the nation’s lawsuits filed under the Americans with Disabilities Act (ADA). Unfettered lawsuit abuse is causing higher prices for everyday goods and services — from the groceries we buy at the store to the care we receive at the doctor’s office.

A recent report by the U.S. Chamber of Commerce Institute for Legal Reform found that California had one of the highest per-household tort costs in the nation. In 2022, California’s total tort costs amounted to a staggering $72 billion – $5,429 per household, $1,222 more than the national average.

California consumers are already being squeezed with the highest taxes in the country, we cannot afford the growing cost from out-of-control lawsuit abuse. It’s past time for California lawmakers to get serious about tort reform and stop frivolous lawsuits.

In California, a small fraction of predator trial lawyers are responsible for filing the vast majority of frivolous lawsuits, exploiting loopholes in the legal system to force quick settlements and enrich themselves at the expense of businesses, consumers, and taxpayers. These attorneys target entire industries — such as small businesses, healthcare providers, or property owners — filing hundreds or thousands of nearly identical lawsuits in hopes of quick settlements. Their goal isn’t to win in court, but pressure defendants into settling to avoid even more costly and drawn-out legal battles.

As a farmer and small business owner, I have seen firsthand the impacts of California’s lawsuit-friendly environment that makes it easy to file cases with little to no merit while shifting the burden of proof to the defendant. In certain cases, lawyers are able to sue a business without proving actual harm to a client or even when no real damage has occurred. For farmers and small businesses like mine, frivolous lawsuits are not only devastating to our bottom line, but increase the cost of farm to fork. It takes just a single technical violation lawsuit to drain a farmer’s resources, forcing them to divert their limited funds from crop production to legal defense.

The end result? Higher prices at the grocery store and increased difficulty for family-run farms to survive in an already competitive industry.

Ending lawsuit abuse is essential for creating an environment where businesses and consumers alike can thrive. The constant threat of costly lawsuits discourages investment, limits growth, and increases the prices of everyday necessities. By ensuring a fairer legal environment, businesses will be able to focus more on innovation and expansion, leading to job creation and lower prices for consumers.

Critics of tort reform often claim that it denies victims fair compensation. However, the goal of reform is to ensure fairer, more predictable outcomes for legitimate claims while stopping frivolous lawsuits from causing real harm to all Californians.

We can’t continue down this path that is causing California to become unaffordable for the middle class and working families. Twenty years ago, California voters overwhelmingly approved legal reforms to curb rampant lawsuit abuse. It’s time for lawmakers to stand up to the special interest trial lawyer lobby and stop frivolous lawsuits — helping to lower costs for consumers, promote innovation, and create a more sustainable business environment that grows our economy and creates jobs. Let’s work together to implement common-sense reforms that will benefit every Californian.

Greg Van Dyke is the President of California Consumer Advocates for Affordability and Safety, a statewide organization dedicated to championing the rights and interests of consumers across California.