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What would you do if you had another $2,298? Take a tropical island vacation, buy new kitchen appliances, put the money in the bank or hand it over, as you do now, through higher prices every time you shop by way of the little known ominous and pervasive “hidden lawsuit tax.”  

According to a new report from Citizens Against Lawsuit Abuse, we all pay the price of lawsuit abuse when businesses are sued, jobs are cut and prices go higher by shelling out $2,298 in the lawsuit tax, and it’s up $178.65 this year alone. 

California has the dubious distinction of being the third worst “judicial hellhole” in the U.S. due to “novel theories of liability” that drive economic losses or lost gross product of nearly $89 billion and 825,475 jobs per year, according to the report (found online at https://tinyurl.com/2p85nj2v). Instead of passing laws making it easier to sue a business, the governor and legislature must now enact common sense solutions and novel theories of their own by creating laws that protect business instead of incentivizing people to sue. 

They need to save the state, the businesses and jobs they create. 

Business owners from across California tell me about their unwarranted lawsuits. One business owner shared how he received a demand letter from a plaintiff, who sued 2,000 other business owners from across the state with unwarranted Americans with Disabilities Act lawsuits. The plaintiff alleged the front door to his shop wasn’t wide enough for him to enter. What makes this case suspect is that both the business owner’s son and brother-in-law, who are disabled, can enter and exit the shop with ease. 

He didn’t have to pay the plaintiff, but the process still cost $2,000. Seems to me that it’s time to put an end to this money-making scheme at the expense of someone else’s hard work. These shakedowns are regrettably a way people abuse the system to make money hoping the business owner would just write a check, drop it in the mail, and the case would go away. 

California is a state in crisis. California must support their best revenue sources—businesses and job creators—and create an environment that enhances business development, innovation, increased productivity and employment, instead of a legal environment stacked against business that incentivizes people to sue business for their own personal gain. 

For too long, lawmakers and the governor have allowed policies that have resulted in a cottage industry that rewards meritless lawsuits and forces businesses to settle because they simply cannot afford to fight back.

The costs of litigation are extreme. Decreasing excessive costs of litigation would increase productivity and increase the competitiveness of the state’s businesses because they could invest the money in their business, creating new jobs, expanding and everything that enhances a community and creates tax dollars. 

Instead, last year, excessive tort litigation had a direct cost of $57.139 billion, and a loss in local government revenue is $3.883 billion each year, according to the report from the Perryman group.

What would you do with $2,298? Take a tropical vacation, buy new kitchen appliances, or put the money in the bank? How to use the money you earned should be your choice and for your benefit. 

Make the choice this election day by getting to know where your elected officials and candidates stand on civil justice reform and lawsuit abuse. Vote out those who will continue the mayhem with new ways to increase lawsuit abuse and increased hidden taxes and start making plans how you would keep the money you earn and use it for yourself or your family instead of shelling it out to cover the cost of shakedown lawsuits.

Victor Gomez

Executive Director, Citizens Against Lawsuit Abuse

Former Mayor of Hollister

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