CJAC: Civil Justice Association of California

Dec 15, 2011

California Ranked Second in Latest "Judicial Hellholes" Report

State’s Plaintiff-Friendly Laws are Highlighted for the 10th Year in a Row

SACRAMENTO - California has maintained its #2 ranking in the latest “Judicial Hellholes” report, released today by the American Tort Reform Foundation. The state was ranked #2 in last year’s report as well, and has been included in one form or another every year since the rankings began in 2002. The issues highlighted in this year’s report include meritless class actions, shakedown consumer and disabled access lawsuits, exceptionally high punitive damages, and an inability to stop vexatious litigants.

The annual Judicial Hellholes report compiles the most significant court rulings, legislative actions, and abuses within the civil justice system in various jurisdictions. While the city of Philadelphia claimed the #1 ranking for the second year in a row, this year’s report says of California that “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.”

“These reports have done a fine job of documenting the ways in which California allows abuse by plaintiffs’ attorneys throughout our state,” CJAC President Kim Stone said. “The fact that we continue to rank as one of the worst judicial hellholes in the country shows that we have a long way to go to create a more level playing field between defendants and plaintiffs. As these reports have shown, in many lawsuits the plaintiffs weren’t even harmed and didn’t lose any money, but they are still able to force defendant businesses to waste precious time and resources.”

Among the specific developments cited in the report from the past year are:

  • The state Supreme Court’s ruling in January that undermined Proposition 64, which was sponsored by CJAC and approved by voters in 2004, by allowing plaintiffs to sue Kwikset because its locks said “Made in the USA” when a few minor components had been made abroad.
  • The Alabama-based law firm that hoped to exploit California’s consumer protection laws by suing Taco Bell for calling the meat in its tacos “seasoned ground beef” instead of “taco meat filling.”
  • The hot-air balloon companies that suffered major financial losses defending themselves against a lawsuit, which was dropped in August, by a couple that made an unsubstantiated claim that the balloons flew over their olive farm compound and invaded their privacy.

California was, however, also mentioned in the report’s “Points of Light” section. The report cites the state Supreme Court’s ruling in August that prevents plaintiffs from recovering “phantom damages”, the difference between the amount of medical expenses billed by a doctor (the “retail rate”) and the amount that an insurer actually pays at the rate that had been previously negotiated with the doctor.

The full report and reports from previous years can be found at www.judicialhellholes.org.

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