The American Tort Reform Association (ATRA) announced that California has been placed on its "Heat Watch" list in the latest Legislative HeatCheck report. This designation highlights concerns over a surge of proposed legislation that could significantly increase liability in the state.
According to ATRA, a deal was reached to reform the Private Attorneys General Act (PAGA) in California. The reform limits fines for employers who address violations and requires that plaintiffs filing lawsuits under PAGA must have directly experienced the alleged violation. ATRA also noted that twelve new legislative proposals in California could expand liability, potentially affecting small businesses, while efforts to pass laws aimed at reducing lawsuit abuse did not succeed.
California ranks fourth in ATRA's Judicial Hellholes® report due to high tort costs, which impose an annual financial burden on residents and affect job availability. Since 2017, the top 20 plaintiffs' firms in California have contributed $15.4 million to state political campaigns, with a significant portion going to trial lawyer advocacy groups and Governor Newsom. ATRA's Legislative HeatCheck report placed California's legislature on its "Heat Watch" list, alongside Michigan and New Jersey.
"While California’s work on reforming the Private Attorneys General Act this year is encouraging, we’re still seeing more negative than positive legislation that could impact the state’s legal climate," said Tiger Joyce, ATRA president. "The trial lawyer lobby remains highly influential, pushing an aggressive slate of liability-expanding bills that threaten to further burden businesses and consumers."
The American Tort Reform Association (ATRA) is a nonpartisan, nonprofit organization focused on reforming the civil justice system in the United States. Founded in 1986, ATRA works to create a fairer legal environment through public education and legislative advocacy, partnering with a network of state-based coalitions and supported by over 142,000 grassroots members.