Northern California Record

Monday, November 18, 2019

'Shakedown lawsuits' drive up cost of business in state, CALA director says

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By Rich Peters | Aug 19, 2019


SACRAMENTO – A recent CNBC state-to-state business report exposed the difficulties of doing business in the state of California. The annual poll ranks each state across the country in a number of major categories, including workforce, economy and structure and the Golden State finished among the worst.

Overall, California ranked 32nd in the nation, down from 25th a year ago, and 50th for its regulatory and legal climate. Cost of doing business, cost of living and business friendliness all received an F grade.

“Companies come here to get in on the gold rush of venture capital, but high costs and regulation can stifle the dream,” the poll declares. 

The low ranking comes as little to no surprise to many pundits across the state.

Ken Barnes, executive director of the Citizens Against Lawsuit Abuse said that lawyers filing "shakedown" lawsuits are costing jobs and increasing prices.

“California is a challenging place for consumers, workers and employers,” said Barnes. “Trial lawyers have California in a death grip, and their squeeze of shakedown lawsuits is driving up the cost of products and services, eliminating jobs and forcing many businesses to close. Two years ago, The Perryman Group estimated that California is down over 197,000 jobs due to excessive tort litigation. That's a lot of families being negatively impacted by greedy trial lawyers.”

One of the larger issues taking place is the strict implementation of Proposition 65, or the Safe Drinking Water and Toxic Enforcement Act. The law requires businesses to inform Californians about exposures to such chemicals and requires the state to maintain and update a list of chemicals known to the state to cause cancer or reproductive toxicity, but has steadily grown into a logistics nightmare for Californians.

The poll was conducted by CNBC through the economic profile sources of: U.S. Census Bureau, U.S. Bureau of Economic Analysis, U.S. Bureau of Labor Statistics, Federation of Tax Administrators, American Petroleum Institute (excluding 18.40 cent/gallon federal tax), Moody's Investor Service, and S&P Global Market Intelligence.

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California Citizens Against Lawsuit Abuse

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