As CALA supporters across the nation recognize Lawsuit Abuse Awareness Week, those of us here in California should take stock of where our state stands. Our state is ranked 4th worst in business legal climate, which is part of the reason it was again ranked last – again – by CEOs for its business climate. We have one of the nation’s highest unemployment rates, and things are not improving very quickly.
Not all of the news out of California is gloom and doom, though. The legislature passed and the governor signed two badly-needed legal reforms this year. What’s more, the governor vetoed another bill that would have opened up farmers to the same type of abusive lawsuits that are hurting small businesses throughout California.
As a small business owner, I am cautiously optimistic that it appears that at least some of California’s leaders are starting to recognize how California’s legal climate encourages abusive lawsuits, and how those abusive lawsuits in turn damage our economy and hurt job creation. My own business, Barney’s Beanery, was targeted by an abusive class-action lawsuit that cost my business almost a million dollars. That loss forced me to push back plans on expansion and hiring new workers.
For California ’s economy to get moving again, our elected officials need to pass laws that create jobs, not lawsuits. Until lawsuit abuse in this state is stopped, thousands of small businesses like mine will continue to operate in fear of a lawsuit, discouraging investment and job creation precisely when we need it most.
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