Schwarzenegger to Fight for Legal Reform
January 8, 2010
As even casual political observers know, California Governor Arnold Schwarzenneger has had a turbulent tenure as the state’s executive-in-chief. That promises to continue, based on a bold pledge he made in his final State of the State address this week.
In a tribute to his previous body-building career, Ahh-nold has vowed to take on nothing short of a Herculean task: enacting legal reform in the Golden State.
With Democrats in charge of the state legislature — all backed by powerful trial bar interests — is the Gov. simply looking to go down as the action hero he once was, guns firing in a blaze of glory?
Nope - Gov. Schwarzenegger gets the same thing that Gov. Haley Barbour in Mississippi (still fighting to protect legal reforms), Gov. Rick Perry in Texas, and many other governors get: legal reform powers job creation.
California voters get it, too. A recent poll reported that 71% believe lawsuits are a job killer and more than six in ten say lawsuit reforms would bring new jobs to the state. Tom Scott, executive director of the California Citizens Against Lawsuit Abuse, puts it succinctly:
“One lawsuit can be the difference between being in business and being out of business.”
And jobs, jobs, jobs, are what the state needs — more than 2.2 million Californians are out of work and state unemployment is above 12%.
Unfortunately, recent surveys don’t paint a pretty picture for boosting employment anytime soon. Chief Executive magazine recently delivered more grim news when it comes to attracting the capital investment necessary to fuel job growth. Its readers ranked California as the worst state in the nation in which to do business.
The best state? Texas, where common-sense legal reforms enacted several years ago continue to constrain medical costs and to attract new corporate headquarters to the state.
Taking a page from the Texas playbook, Schwarzenegger issued the following statement, outlining his intended reforms:
“Unfair and frivolous suits impact where companies locate or expand. California’s current litigation laws lead to large settlements with little value to consumers but become worth millions to lawyers at the expense of California businesses. Current statutes also impede growth by holding businesspersons liable for defective products - even if the seller had no knowledge or control over the defect - and allowing for punitive damage awards that are wildly unpredictable among similar cases.
“The Governor will propose a set of statutory changes that will set forth clear guidelines for class action lawsuits improve California’s litigation climate by allowing defendants to appeal class action certifications and by requiring the plaintiff rather than the defendant to pay for notification to other potential class members.
“In addition, these reforms will provide for limitations on the scope of damages assessed against business persons for defective products and eliminate unreasonable and excessive noneconomic and punitive damages awards.”
Nearly 1.4 million lawsuits are filed each year in the state of California. And for many years our friend John Sullivan, head of the Civil Justice Association of California, has chronicled and fought against job-crushing, trial lawyer tactics including ADA lawsuit mills, high-dollar asbestos claims, employment lawsuits, and on and on. To say the governor is facing an uphill battle would be kind.
But the need could hardly be more clear. The CJAC blog recently reported that fully 91% of California businesses were sued in 2009 and nearly one-third (32%) faced more than 20 lawsuits.
Rather than sending their governor back to Washington to beg for federal bailouts, California’s Democratic legislators ought to ally with Schwarzenegger, enact serious legal reform and jumpstart job-creation.
Posted by Dan Pero in the categories: California, Lawsuit Abuse
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[...] I reported earlier, California Governor Arnold Schwarzenegger has pledged to push for tort reform in this, his final [...]