California Legal Climate is Getting Worse for Business

I have been fighting for legal reform for quite some time now and I am constantly amazed at how difficult it is to change some things California. I have always known that the legal reform fight in this state is a tough one. The trial lawyers spend gobs of money lobbying elected officials to fight reform and even open up new avenues for litigation.

Recently, the U.S. Chamber's Institute for Legal Reform released its 2012 Annual State Liability Systems Ranking Study, which explored how fair and reasonable the states’ tort liability systems are perceived to be by U.S. businesses. For the study, 1,125 participants were interviewed, including in-house general counsel, senior litigators or attorneys, and other senior executives with knowledge about litigation matters.

Key findings include 70% of these individuals see a state's litigation environment as an important element that will likely impact important business decisions at their companies, such as whether they will locate or move a business to or out of a state.

Sadly, the study ranks California’s legal climate 47th out of the 50 states – the worst ranking for California ever in the study. Two of its cities, San Francisco and Los Angeles, were singled out by participants as among those with the least fair and reasonable litigation environments in the nation.

I am not sure how many more of these studies have to be produced for our leaders to get it. Simply put, businesses are wary of expanding in states with hostile business climates. An out-of-control legal climate is not the way for California to convince businesses to locate here and create jobs.

Business as usual is getting us nothing but high unemployment. To get its economy moving forward, California needs to make significant legal reforms. Why? To paraphrase James Carville, it creates jobs, stupid.

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