Victor Gomez, executive director of Citizens Against Lawsuit Abuse (CALA), said that the governor and state legislature could easily end the excessive "lawsuit tax," which cost Californians $2,298 per person last year. He made this statement in a January 24 blog post.
"The Governor and legislature could easily fix and put an end to the excessive “lawsuit tax,” which burdens all of us with higher prices on all goods and services," said Gomez. "A new report from Citizens Against Lawsuit Abuse shows that Californians pay a hidden “tort tax” of $2,298 for the price of a lawsuit. Last year, excessive tort litigation had a direct cost of $57 billion, the loss in local government revenue is $3.9 billion a year, and 825,475 lost jobs."
Governor Gavin Newsom has temporarily suspended the California Environmental Quality Act (CEQA) to expedite rebuilding efforts for victims of recent wildfires. This decision underscores ongoing issues with CEQA, as three previous governors have been unable to implement reforms. The building industry has long criticized CEQA for causing delays and increasing construction costs. Newsom's action raises questions about whether broader CEQA reform is necessary beyond emergency situations.
According to a January 16 Wall Street Journal editorial, California and Florida have taken different approaches in managing their home insurance markets. California’s Democratic insurance commissioners have historically suppressed insurance rates, leading to market distortions and reduced coverage availability. In contrast, Florida implemented reforms to address similar issues, resulting in a more stable insurance environment. The editorial suggested that California could benefit from adopting strategies similar to Florida's to improve its insurance market.
California faces some of the highest tort costs per household in the United States, with total tort costs reaching $72 billion or $5,429 per household. A report by the U.S. Chamber Institute for Legal Reform highlights the financial burden of the state's tort system. Stephen Waguespack, president of ILR, emphasized the need for reform to reduce excessive litigation costs. These high costs impact businesses and consumers by driving up prices and limiting economic growth.
According to a February 18 post on InsuranceRateReporter.com, a survey conducted by the American Property Casualty Insurance Association (APCIA) and Munich Re US found that plaintiff lawyer tactics such as third-party litigation funding (TPLF) and jury anchoring contribute to rising insurance costs, with an estimated $529 billion impact on the U.S. economy. The survey indicates that 69% of Americans believe these practices increase insurance premiums, while 86% support legal reforms to address them. However, a significant portion of respondents remain unaware of these tactics, with 75% unfamiliar with jury anchoring and 70% not recognizing TPLF.
Gomez is a former mayor of Hollister and served on the Hollister City Council from 2008 to 2016. He has extensive experience in public policy, government affairs, and business advocacy, including roles as chief of staff to two San Jose City Council members. Before his legislative career, he operated pizza franchises for nearly 18 years.