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New York City & Albany, New York

An October 2010 report by the Empire Center for New York State Policy offers discouraging, if hardly surprising, news: From 1993 through 2007, job creation in New York staggered along at just one-fifth the average rate across the nation.  Meanwhile, more than 393,000 jobs were relocated to other states, leaving New York among the very worst states with respect to net outmigration of jobs. 

Surely New York’s dauntingly high rates of taxation and tangle of redtape regulations have had much to do with employers seeking greener, more profitable economic pastures in other states.  But business executives responsible for decisions about expansion or relocation also routinely consider states’ litigation and liability climates.  New York’s disadvantage in this regard is growing fast. 

Last year’s edition of the Judicial Hellholes report cited New York City among the worst jurisdictions in the nation for senselessly costly litigation.  This year, a headline-grabbing lawsuit that accuses, among others, a 4-year-old girl of negligence in a sidewalk accident that occurred while she rode her training wheel-equipped bicycle along East 52nd Street typifies the ongoing madness in “Sue York.” Another suit, this one out on Long Island, pitting one golf buddy against another after a poorly struck shot caused an injury, has reached the state’s highest court where a final decision is pending.

But this runaway litigiousness and the businesses that run to other states as a result does not seem to bother many policymakers in the state capital of Albany.  In fact, personal injury lawyer turned Assembly Speaker Sheldon Silver has repeatedly killed tort reform bills in the legislature while aggressively pursuing a liability-expanding agenda.  In addition to having a personal financial stake in a Buffalo-area company that provides loans to litigation-ginning law firms, Speaker Silver has, among many other legislative efforts, backed bills that would make workplaces the target of “bullying” lawsuits and jeopardize the state’s vitally important financial industry.

One of Speaker Silver’s key legislative allies in threatening the financial industry with expansion of the state’s Martin Act, former State Senator Eric Schneiderman, was just elected to become the state’s next attorney general.  So, unless the outgoing attorney general and incoming governor, Andrew Cuomo, lives up to his campaign stance as a budget-balancing moderate amenable to reasonable tort reforms, look for lawsuit-loving Albany to drag the rest of New York down with other Judicial Hellholes.