CJAC: Civil Justice Association of California

Another Survey Ranks CA as Worst for Business; Brown Veto Will Keep it From Getting Worse

By Todd Roberson on 09/26/2011 @ 11:48 PM

Tags: Legal Climate

A report was released this month by Development Counsellors International (DCI), an economic development consulting firm, titled "Winning Strategies in Economic Development Marketing", in which DCI surveys corporate executives on their perceptions of state business climates and how economic development organizations can build a favorable image. Not surprisingly, they find that California has some work to do in this regard.

This is the sixth time since 1996 that DCI has conducted this survey, and California has been ranked 50th since 2002. This year 70% of respondents put California in their bottom three states in terms of business climate. California and New York swapped the first and second place spots on this list since DCI first conducted the survey in 1996.

You can find more info on this year's report here.

California continues to rank at or near the bottom of states in business and legal climate studies. Earlier this year, a survey released by Chief Executive magazine also found California to be the worst state in the nation for business - for the seventh year in a row. And last year, the Institute for Legal Reform ranked California 46th in its State Liability Systems Ranking Study.

Fortunately, we received some welcome news today that will at least keep our litigation climate from getting worse. Governor Brown vetoed Assembly Bill 559, one of the more egregious proposals this year backed by plaintiffs' attorneys.

This bill would have taken away judges' discretion to reduce or deny attorneys' fees in unlimited civil cases when plaintiffs recover less than $25,000 (the minimum to qualify as an unlimited civil case). The issue arose in a case where a plaintiff received an $11,500 award but his attorney asked for $870,000 in fees. The judge denied that motion, and by vetoing AB 559, Governor Brown has preserved judges' ability to decide what amount of attorneys' fees are appropriate.

Cases where the amount in dispute is between $7,500 and $25,000 are supposed to be filed as limited civil cases. This limits the time and cost of litigation compared to unlimited civil cases, so we should maintain the deterrent to plaintiff's attorneys inappropriately filing unlimited civil cases.

You can read the veto message here. Thank you Governor Brown!

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