California courts a hostile environment for business

Washington Examiner Editorial:

Each year the American Tort Reform Association releases a report on "Judicial Hellholes," jurisdictions in which venue-shopping trial lawyers can strategically sue because the rules, procedures and judges are so lenient toward abusive lawsuits. The new report, out this month, is especially significant because America's most populous state, California, is designated the No. 1 such hellhole in the U.S.

"No significant signs of much needed reform can be found in the barely solvent Golden State," ATRA notes, "as preposterous consumer class actions, coercive disability access lawsuits and mounting asbestos litigation, among other problems, continue to drive businesses and jobs to less litigious neighboring states while court budgets are slashed and dockets grow evermore backlogged."

For example, California has become a magnet for dodgy class-action consumer lawsuits because state judges have interpreted its laws protecting consumers from false advertising and other harm to "require no proof of deception, reliance, or injury, while applying lax class certification standards."

Meanwhile, the worst abuses of civil law continue there unabated, including handicapped-access suits that are often based on violations that aren't real. "California's small businesses," ATRA reports, "have been under siege from trolling disability-access lawyers and their professional plaintiffs who look for technical rules violations, then demand thousands of dollars to settle. ... Lawyers defending small business owners have recognized the growing trend and say that plaintiffs usually ask for anywhere between $4,000 and $10,000 because they know it would cost more for a business to fight the suit than to settle." The lack of counterbalances, such as a "loser pays" law or career-damaging sanctions against attorneys who participate in such abuses, have also helped put California in the top five for slip-and-fall claims that are probably fraudulent, according to the National Insurance Crime Bureau.

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This is another advantage Texas has over California and it is another reason Texas is a destination state for many California companies as well as foreign companies who settle in Texas instead.   It is one of the key selling points of Governor Perry.