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January 23, 2021

Guest View, Victor Gomez: Sue-happy California ranks third worst

By Victor Gomez

In my 17 years as a central coast franchise owner, I was always grateful for my community and the passion they had for supporting local family-owned businesses. Locally owned businesses, whether franchises or independent, are the backbone of our local and statewide economies. Small business creates a majority of jobs in any local community and that translates into millions of jobs statewide. So, you would expect that state and local leaders would do all that they could to protect these job creators, especially during this Covid-19 pandemic.

Think again.

Recently, California landed at the No. 3 spot on the 2020-2021 Judicial Hellholes list provided in a report by the American Tort Reform Foundation. This is nothing to be proud of. Judicial Hellholes are the most unjust local courts and state civil justice systems in the country. The 2020 report shines a light on lawsuit abuse and its effects. This year, California dropped to number 3 instead of last year’s number 2, but not because California is improving. California’s fall to the No. 3 spot in 2020 cannot be attributed to any improvement in the state’s liability climate, but rather results from the severity of problems in Pennsylvania courts and New York City.

As an example, halfway through 2020, California had the most federal Americans with Disabilities Act accessibility lawsuits—2,702. Most lawsuits allege that a restaurant, store, or its parking lot fails to meet any of numerous accessibility standards. For example, if a mirror in a restaurant was an inch too high by ADA standards, there was no “warning” to the business owner, only a lawsuit. Combined, the other states in the Top 10 jurisdictions for ADA lawsuits had only 1,845 cases filed between Jan. 1 and June 30, 2020.

Businesses, small and large, are struggling to stay afloat, yet California’s leadership failed to ease unjust liability burdens and further stacked the deck against their survival. In fact, almost 60 percent of Californians believe that lawmakers are not doing enough to combat lawsuit abuse and more than 90 percent believe that now is not the time to sue. Excessive tort costs in California lead to an annual estimated $15.1 billion lost in direct costs and 242,761 jobs. This amounts to each Californian paying a $594.74 “tort tax.”

Shouldn’t we expect our state leaders and Governor to do better?

If California wants its job creators to survive, things need to change. It’s time for our state leaders to step up to the plate and protect our small business owners from these frivolous lawsuits. If they refuse to, many will continue to leave the state.

Victor Gomez is the executive director of California Citizens Against Lawsuit Abuse, and former mayor of the City of Hollister.

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