American Tort Reform Association places California legislature on ‘Heat Watch’

The American Tort Reform Association (ATRA) announced in a press release that it placed California’s legislature on "Heat Watch" for a second consecutive year in its latest Legislative HeatCheck report. This decision was based on proposed civil justice reforms alongside potential liability expansions.

According to ATRA's 2024 Legislative HeatCheck report, California’s legislature received a "Heat Watch" rating again due to a combination of civil justice reforms and potential liability expansions. Pro-reform bills such as S.B. 84, S.B. 690, and A.B. 743 aimed at curbing lawsuit abuse and improving funding transparency but did not advance. Meanwhile, bills like S.B. 82 and S.B. 29, which expand damages and restrict arbitration, remain active and could increase costs for small businesses and consumers.

The report quantifies the significant financial impact of excessive litigation on California residents, stating that the state’s per-person "tort tax" is now $2,458—more than $9,833 annually for a family of four. The cost has risen by over 28% since 2021, highlighting the growing economic burden on Californians due to the state's civil justice system. In metropolitan areas such as San Francisco and Los Angeles, the annual tort tax can reach $4,651 and $3,658 per person respectively, up to 89% higher than the state average.

The Legislative HeatCheck report also links California’s tort costs to broader economic effects. Excessive liability and litigation have contributed to an estimated loss of 829,255 jobs and $5 billion in government revenue each year. ATRA states that these high costs are a key reason why California’s courts are ranked among the nation’s top "Judicial Hellholes." The state’s legal climate is cited as a deterrent for small businesses and job creators, with the 2024 report naming California as one of the top five most problematic judicial environments in the country.

According to its official website, ATRA is a nonprofit advocacy group focused on achieving a fair, balanced, and predictable civil justice system nationwide. The organization produces reports such as Judicial Hellholes and Legislative HeatCheck to inform lawmakers, business leaders, and the public about the impact of civil justice policies and legal trends. ATRA's mission centers on supporting reforms that benefit consumers, job creators, and the economy through public education, policy research, and legislative advocacy across the United States.