Governor, legislature have unique opportunity to help all Californians by ending the ‘hidden tort tax’
California Governor Gavin Newsom curiously signed an executive order temporarily suspending the crippling California Environmental Quality Act CEQA, which will now allow victims of the recent fires to more quickly restore their homes and businesses.
Interestingly, it’s been no secret that three previous governors have all called for CEQA reform to no avail. Those in the building industry have long known of the abuse of CEQA resulting in long delays which only adds onto the cost of a new home or business, The law has been twisted to allow the filing of lawsuits where some profit at the expense of others. CEQA delays can go on for years.
CEQA, a landmark law passed in 1970 and signed by then-Governor Ronald Reagan, created an approval system for building projects that essentially slowed any development. The very fact that the governor is eliminating the delay is an admission that the law is flawed and causes delays and forces costs to go up. Andy Puzder, the onetime CEO of Carl’s Jr., told a meeting of Citizens Against Lawsuit Abuse that, “it’s easier to open a new business in Siberia than it is in Los Angeles, California.”
Perhaps Governor Newsom can take his same pen and offer the same protections to all Californians. CEQA as well as other types of laws that have been abused like ADA, The Americans with Disabilities Act landmark legislation signed into law to ensure the disabled had complete access to public places but because of the loopholes in the law turned into a cottage industry for those who took advantage of it for their own personal gain.
A new report from Citizens Against Lawsuit Abuse shows that Californians pay a hidden “tort tax” of $2,458.33 for the price of a lawsuit. We all pay the price as jobs are cut and prices go even higher because businesses have nowhere else to turn to get the money they need to settle an unwarranted lawsuit and save their business.
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.
Business owners from across California tell me about their unwarranted ADA lawsuits. One business owner shared how he received a demand letter about his website from a plaintiff, who said if he paid $1,200 dollars the plaintiff would not file a lawsuit. Only, the website actually tested as being quite compliant. Some people just want to make a buck off of small business owners thinking the business owner would just respond to the demand letter and send the money.
Reforming the legal system such as CEQA and ADA would lead to substantial economic benefits for all Californians.
Legal reform removes unnecessary burdens and increases productivity, businesses can invest the money in their business, creating new jobs, expanding everything that enhances a community and creates tax dollars. Instead, last year, excessive tort litigation had a direct cost of $61 billion, and a loss in local government revenue is $4.1 billion each year, and 829,255 lost jobs according to a report from the Perryman group.
Now more than ever, the governor and legislature must show leadership and tackle this problem once and for all. They must fix a broken system which generates exorbitant levels of damages or numbers of awards, and which is unpredictable in its outcomes may result in negative impacts through the misallocation of society’s scarce economic and human resources.
Learn more by visiting californoiacala.org
About California Citizens Against Lawsuit Abuse
California Citizens Against Lawsuit Abuse is the state’s largest grassroots movement of small business owners pushing for legal reform to improve California’s economic climate by working to address lawsuit abuse. Join with our free supporter-based grassroots movement to share your story with legislators about how a shakedown lawsuit almost forced you to close your business, cut jobs and unable to support the community.
