California has long stood at the forefront of innovation both in technology and increasingly, in the courtroom. Over the past decade, the state has become a magnet for so-called "nuclear verdicts," jury awards that exceed $10 million, often by staggering margins. These outsized awards, once considered anomalies, have become alarmingly routine in California, reshaping the legal and business landscapes across multiple industries.
Driven by an aggressive plaintiffs' bar, a proliferation of novel legal theories, and statutory regimes that invite high stakes litigation, California now leads the nation in nuclear verdicts. According to a report published by the U.S. Chamber of Commerce's Institute for Legal Reform1, California led the nation in nuclear verdicts from 2013 to 2022, with 199 such verdicts totaling over $9 billion in damages. Los Angeles County alone accounted for more than one-third of these cases.
The rise in these verdicts is not incidental. It reflects deeper structural and cultural elements within California's legal system. From expansive liability doctrines to consumer protection laws with built-in incentives for litigation the stage is set for runaway verdicts. Recent legislative reforms, such as those addressing the Private Attorneys General Act (PAGA), aim to address some of the systematic factors fueling excessive verdicts, but whether those efforts will stem the tide remains to be seen.
Understanding Nuclear Verdicts
Nuclear verdicts are not merely large verdicts, they are awards that exceed the traditional compensatory measures of damages and are often accompanied by significant punitive or non-economic damages. These verdicts typically arise in personal injury, wrongful death, employment, intellectual property and product liability cases.
While high verdicts are not new, what makes nuclear verdicts particularly concerning is their unpredictable nature and the dramatic escalation in frequency and size. Several systematic factors have contributed to their growth in California:
- Expansive tort liability doctrines
- Permissive evidentiary standards for non-economic damages
- Jury pools in urban counties that are perceived as plaintiff-friendly
- A surge in litigation financing and marketing.ii
Recent Verdicts Illustrating the Trend
California's track record includes some of the most staggering jury awards in recent memory. Notably:
- In Jane Doe v. County of Los Angeles a jury returned a $61 million wrongful death verdict, of which $59.7 million were non-economic damages.
- In Johnson v. XYZ Corporation, three former employees obtained $80.2 million in damages, including $75 million in punitive damages, following a finding of retaliatory termination.
- In Smith v. ABC Corp., a jury awarded $41.49 million, including $30 million in punitive damages for a discriminatory filing claim.
- In Gurpeet Kaur and Veer Signh Ghotra, by and through his Guardian ad litem, Bikramjist Singh Sohal v. Gurdeep Singh dba Suni Transport, plaintiffs secured $58 million in a wrongful death case.
- In McAlister v. Thompson, a Chatsworth jury awarded $36.4 million for a motorist's injuries.
California as a Breeding Ground for Expansive Liability
California's reputation for legal innovation has long made it fertile ground for plaintiffs' attorneys testing new theories of liability. A particularly consequential example can be found in Gilead Sciences, Inc. v. Superior Court of San Francisco County, 92 Cal.App.5th 997(2023), in which the California Court of Appeal imposed a novel "duty to innovate," finding that a manufacturer could be liable not for a defective product per se, but for allegedly delaying the release of a potentially safer alternative. The California Supreme Court decision to review the ruling signals judicial interest in refining or perhaps constraining the scope of this new liability theory.
Legislative Response and Curbing PAGA Abuses
Labor code enforcement through the Private Attorney General's Act (PAGA) has long been a source of friction between the plaintiffs' bar and California employers. Enacted in 2004, PAGA authorizes employees to file representative actions on behalf of the state and other workers. But the model has invited abuse, with claims rising from 2,555 in 2007 to 5,117 in 2023.iii
In response, Governor Gavin Newsom signed two reform bills, AB 2288vi and SB 92v, into law in July 2024. Key provisions include:
- Raising the employee share of penalties from 25% to 35%.
- Requiring the claimants to have personally experienced the alleged violations.
- Reducing penalties for minor infractions that are promptly corrected.
- Limiting maximum penalties when employers respond proactively within 60 days.
- Establishing higher penalties for willful violations.
Whether these reforms will meaningfully curb abusive PAGA filings remains to be seen, but they represent a significant policy shift toward moderation.
Prop 65 and the Threat of Serial Litigation
Proposition 65 continues to create a fertile ground for opportunistic lawsuits. This 1986 voter initiative requires businesses to warn consumers if products contain any of over 1,000 chemicals deemed potentially harmful. It permits private enforcement, which has led to thousands of notices and settlements, often without any showing of harm. As of October 1, 2024, there were 4,108 Prop 65 notices filed in the year.vi
ADA Lawsuits and Unruh Act Penalties
California courts are also a hotspot for Americans with Disabilities Act (ADA) litigation. In the first half of 2024 alone, 1,588 ADA cases were filed in federal courts within the state, nearly 30% of the national total.vii
For example, one plaintiff has filed over 2,000 ADA lawsuits. The U.S. Supreme Court recently denied certiorari in one of those cases, Acheson Hotels, LLC v. Kaufer, leaving in place a Ninth Circuit ruling that prevents courts from considering a plaintiff's history of litigation in assessing standing. California's Unruh Civil Rights Act compounds the problem by setting a $4,000 minimum penalty per violation, far higher than federal ADA standards, plus attorneys' fees, incentivizing rapid-fire claims against small businesses.
Litigation Funding and Political Contributions
Third-party litigation funding also plays a role in encouraging high-value verdicts. With funders investing millions in exchange for a share of awards, plaintiffs' lawyers can extend litigation and reject settlement offers that might otherwise be reasonable. According to the American Transportation Research Institute, third party litigation funding is linked to higher jury awards and increased settlement demands.viii
Meanwhile, the political influence of the plaintiffs' bar continues to shape the legal environment. Since 2017, the top 20 plaintiff firms in California donated more than $15.5 million to political campaigns, according to the American Tort Reform Association's 2024-25.ix
Conclusion
The proliferation of nuclear verdicts in California cannot be traced to a single cause. Rather, it stems from a confluence of legal innovation, statutory frameworks like PAGA and Prop 65, procedural leniency toward serial plaintiffs, and well-financed plaintiffs' bar. While recent legislative efforts may blunt the edge of some litigation abuses, the overall environment remains high-risk for defendants. Businesses, insurers, and policymakers alike must monitor California's evolving tort landscape, particularly as its legal doctrines often serve as bellwethers for the rest of the country.
i U.S. Chamber of Commerce Institute for Legal Reform, "Nuclear Verdicts: An Update," 2023. https://instituteforlegalreform.com/research/nuclear-verdicts-an-update-on-trends-causes-and-solutions/.
ii American Tort Reform Association, Judicial Hellholes 2024-2025 Report. https://instituteforlegalreform.com/blog/californias-increasingly-high-lawsuit-costs-are-a-financial-burden-on-households/.
iii Id.
iv https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202320240AB2288.
v https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202320240SB92.
vi Judicial Hellholes Executive Summary 2024-2025. ATR Foundation. https://www.judicialhellholes.org/reports/2024-2025/2024-2025-executive-summary/.
vii Id.
viii Third Party Litigation Financing: Impacts on the Trucking Industry. PrePass Safety Alliance (Dec. 16, 2024). https://www.prepassalliance.org/third-party-litigation-financing-impacts-on-the-trucking-industry/.
ix Judicial Hellholes Executive Summary 2024-2025. ATR Foundation. https://www.judicialhellholes.org/reports/2024-2025/2024-2025-executive-summary/.
