Governors and state lawmakers spend a lot of time focusing on legislation that will improve tax and regulatory climates, understandably so. But — as is now on display in Georgia, South Carolina, Texas, and elsewhere — governors and lawmakers are also focused on the ways in which their state’s legal climate is another significant driver of the cost of living and doing business, which is why tort reform is now being debated in some of the largest and fastest growing states.
Tort reform was most recently enacted by Georgia lawmakers on March 21 with the passage of Senate Bill 68. SB 68 is a tort reform package that aims to make Georgia a less fertile environment for frivolous lawsuits that saddle households and employers with additional costs, while making the state a more costly place in general to live and do business.
“We commend the Georgia legislature for taking this crucial step toward creating a more fair and balanced civil justice system for all Georgians,” Tiger Joyce, president of the American Tort Reform Association (ATRA), said in a statement. “This bill addresses key issues contributing to Georgia’s reputation as a Judicial Hellhole®, particularly problematic ‘phantom’ damage awards, and we look forward to Gov. Kemp signing this into law.”
Going into this year, ATRA had Georgia “ranked the fourth-worst ‘Judicial Hellhole®’ in the country.” “After spending two years atop the list at No. 1, the state dropped slightly in the rankings due to Gov. Kemp’s prioritization of tort reform,” ATRA noted, adding that Georgia’s poor showing in that ranking “is due in large part to the increasing prevalence of multi-million-dollar verdicts, including a recent $2.5 billion punitive damage verdict.”
“Excessive tort costs in Georgia result in a $1,415 annual ‘tort tax’ paid by each resident — that’s nearly $5,662 annually for a family of four,” ATRA noted in its release touting approval of SB 68. “This cost has increased more than 27% since 2021 and also leads to an estimated loss of 134,898 jobs across the state each year.”
Days after approval of SB 68 in Georgia, state senators in neighboring South Carolina approved their own tort reform bill, S. 244, which aims to rein in rising insurance costs. Along with that tort reform effort in the Palmetto State, which now moves to the South Carolina House, Texas lawmakers are now looking to follow suit.
In Texas, the nation’s second most populous state and the planet’s eighth largest economy, Lt. Governor Dan Patrick (R), who leads the Texas Senate, recently introduced a two-bill tort reform package. The bills introduced by Lt. Governor Patrick, Senate Bill 30 and Senate Bill 39, aim to institute some of the same reforms recently enacted in Georgia, such as those seeking to crack down on “phantom” damage awards. Much like the Georgia reform, Texans for Lawsuit Reform (TLR), who supports SB 30 and 39, touts Lt. Governor Patrick’s tort reform package as “meaningful reforms that will put a stop to the abusive lawsuits threatening Texas businesses and endangering the Texas economy.”
On March 31, members of the Texas Senate State Affairs Committee heard testimony for and against SB 30. TLR describes SB 30 as “vital legislation that will restore transparency and fairness to Texas’s courts,” and explains its main objectives thusly: “(1) encourage doctors to treat accident victims; (2) stop the manipulation and inflation of medical damages; and (3) educate jurors on noneconomic damages by providing clear standards and definitions.”
Pam Grooms, with Atlas Energy Solutions, a company that provides frack sand and other services to the oil and gas industry in the Permian Basin, testified in favor of SB 30 at the March 31 hearing. Grooms spoke to the way in which rising insurance costs, stemming from the ability to bring meritless and costly lawsuits, are driving many of her company’s vendors out of business.
“We have about five vendors go out of business every year because they can no longer afford insurance,” said Grooms. “Independent owner-operators and small trucking companies are especially hard hit because they lack the financial resources to absorb the rising cost of insurance. The nuclear verdicts have a ripple effect to the industry.”
Samantha Sizemore with Sizemore Logging, a family-owned logging company, also testified at the March 31 hearing on SB 30. “In recent years we’ve seen our commercial trucking insurance rates skyrocket, despite having only one at-fault claim totaling just $1,000 and maintaining a very strong safety record,” Sizemore said. “From 2020 to 2023, our premiums averaged around $50,000 a year, but this year we were hit with a premium of $98,000, nearly double that previous average.”
Other business owners and representatives, from a variety of industries, testified at the hearing on SB 30 about the way in which insurance costs are crippling their businesses. Many of them echoed the points made by Grooms and Sizemore.
By cracking down on the ability to bring meritless lawsuits and win “nuclear verdicts,” SB 30 and 39 proponents contend that tort reform bring down insurance costs. Opponents of tort reform, meanwhile, argue that it would unduly limit victims’ ability to receive compensation.
As in South Carolina and Georgia, research has also been conducted to quantify the “tort tax” paid by Texans. TLR points to a new study commissioned by Citizens Against Lawsuit Abuse (CALA) and conducted by Waco-based economic research firm The Perryman Group. That study, notes TLR, “found that Texans pay an average of $1,725 more for goods and services every year as the cost of lawsuits and massive court awards are passed on to consumers.”
“This $1,725 lawsuit tax—which drives up the cost of everything Texans buy, from groceries to housing to insurance—is higher than the national annual average lawsuit tax of $1,666 per person,” TLR adds. “Between 2009 and 2023, Texas led the nation in the number of ‘nuclear verdicts’ (i.e., jury verdicts of $10 million or more). According to the CALA study, a total of 207 nuclear verdicts were awarded in Texas during that time, totaling more than $45 billion—costs that are often ultimately borne by consumers throughout the state.”
2025 has all the makings of a consequential year for public policy in Texas. School choice for all Texans, property tax relief, and limits on taxpayer-funded lobbying are all poised to get to the Governor’s desk after years of falling short. If the recent bipartisan vote for a similar proposal in Georgia is any indication, however, tort reform stands a better chance of garnering broad, bipartisan support than the other top, but more high profile priorities for legislative leadership in the Lone Star State.