Biz groups cry foul over CA Dems’ bid to boost climate lawsuits

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Business groups are crying foul over an attempt by California Democratic lawmakers to open the door to potentially massive lawsuits against energy companies whenever extreme weather strikes the state, through a new law, which the business groups described as an “unconstitutional stunt” disguised as a measure to supposedly reduce insurance costs.

More than two dozen groups have stepped forward to oppose proposed California state legislation that supporters claim would make property insurance more affordable by authorizing the California state attorney general to sue energy companies, allegedly for damages related to extreme weather events.

SB 982, titled as the Affordable Insurance and Recovery (AIR) Act, was introduced last month by Sen. Scott Wiener (D-San Francisco.) Wiener asserts the measure would stabilize the state’s insurance market in the wake of disastrous floods and fires. The bill would create a new civil action allowing the attorney general to sue oil and gas companies on the basis that the burning of gasoline and other fuels exacerbates climate change and makes weather disasters more frequent.

The measure’s supporters say damages awards secured from litigation against energy companies could help to compensate those affected by insurance premium spikes that occur in the wake of events such as the 2025 Palisades Fire and Eaton Fire.

“The AIR Act takes an innovative approach to this (insurance affordability) problem by shifting the cost of wildfires and other climate-driven disasters from the survivors who are suffering to the fossil-fuel giants most responsible,” Wiener said when the measure was introduced. “No one should be pushed out of their home by insurance costs, and the AIR Act will take an important step to ensuring they won’t be.”

But the coalition of business, taxpayer and legal-reform groups say SB 982 would drive up the price of gas and electricity rates for California consumers, leading to declining wages, reduced tax revenues and weaker job creation.

“SB 982 is a costly and unconstitutional legislative stunt that does nothing to help Californians and everything to generate headlines for its author,” Jaime Huff, president and CEO of the Civil Justice Association of California, said in a prepared statement. “At a time when our state is already struggling with affordability, lawmakers should be focused on stabilizing the insurance market and lowering costs – not advancing a legally flawed proposal that will leave consumers footing the bill.”

Opponents argue the measure would allow civil lawsuits without the needed proof that energy companies caused climate-related disasters and that it violates constitutional provisions dealing with due process and equal protection.

Victor Gomez, executive director of California Citizens Against Lawsuit Abuse (CALA), stressed that the causes of climate change and extreme weather are complex.

“Climate change and the severe weather events associated with it are global, multi-factor phenomena involving countless actors over many decades,” Gomez told the Southern California Record in an email. “Attempting to assign legal liability to a handful of companies for such broad societal issues raises significant legal and practical concerns.”

Adding another opportunity for costly lawsuits whose outcome is undetermined will do little to stabilize the state’s property insurance market, he said.

“Lawsuit-driven approaches often benefit attorneys and litigation funders while producing uncertain outcomes for consumers,” Gomez said. “The potential for massive damages claims could also create economic ripple effects, including higher energy costs or reduced investment in California.”

Supporters of the bill, including California Environmental Voters and the Center for Climate Integrity, however, cite economic studies showing Wiener’s approach could result in $3,800 in per-household benefits and generate 340,000 jobs.

But Gomez said lawmakers should focus on more practical efforts, such as wildfire mitigation and removing regulatory barriers within the insurance market.

“... CALA is concerned that SB 982 represents a troubling expansion of lawsuit-driven policymaking, and we believe the Legislature should pursue more direct and durable solutions to the state’s insurance challenges,” he said.