Report Highlights 'Tort Tax' Burden on Southern California Families

Lawsuit abuse costs LA, Long Beach, and Anaheim residents nearly $4,000 per person annually, stifling economic growth

Published on Feb. 24, 2026

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A new report from the Perryman Group reveals that residents of the Los Angeles, Long Beach, and Anaheim region face an annual 'tort tax' of $3,972 per person due to California's litigious environment. The excessive costs of lawsuit abuse are estimated to have a $50.8 billion impact on the regional economy each year through lost gross product and direct costs related to goods and services production.

Why it matters

The high costs of lawsuit abuse in California are straining families and businesses, potentially discouraging innovation and raising prices for consumers. Attempts to reform laws like the Americans with Disabilities Act (ADA), which has been a source of frequent lawsuits, have faced challenges, leaving the issue unresolved.

The details

The report found that lawsuit abuse leads to over $32.4 billion in direct costs related to goods and services production in the region, as well as losses of $5.3 billion in state government revenue and $4.4 billion in local government revenue. A restaurant owner faced an $11,000 settlement after being sued under the ADA for a table being 1/16 of an inch too low, highlighting the technical nature of many lawsuits.

  • The Perryman Group report was released in February 2026.

The players

Perryman Group

An economic and financial analysis firm that compiled the report on the economic impact of lawsuit abuse in Southern California.

Senator Roger Niello

The author of Senate Bill SB 84, which would have given businesses 120 days to fix ADA violations before facing consequences, but was blocked in committee.

Senator Ben Allen

A state senator who acknowledged the need to 'fix this problem' during a Senate hearing on SB 84.

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What’s next

Senate Bill SB 84, which offered a potential path toward ADA lawsuit reform, could be considered again in 2026, giving lawmakers another opportunity to enact meaningful change.

The takeaway

The high 'tort tax' burden on Southern California families highlights the need for civil justice reform to address the negative economic impacts of lawsuit abuse, which are straining both individuals and businesses in the region.