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April 25th, 2011

California, #2 Judicial Hellhole, Losing Jobs to Tort-Reforming Texas

The Wall Street Journal’s John Fund offered an interesting piece of analysis this past weekend, demonstrating that California, the #2 Judicial Hellhole, is losing employers and jobs to tort-reforming Texas.

In “California Dreamin’—of Jobs in Texas,” Fund emphasizes California’s high taxes and onerous regulations as factors that have hounded employers into leaving the state.  But as Judicial Hellholes reporting in the past has amply shown, the once-Golden State’s stifling lawsuit industry is also a significant factor for the loss of employers and jobs.

“The contrast is undeniable,” Fund writes.  “Texas has added 165,000 jobs during the last three years while California has lost 1.2 million. California’s jobless rate is 12% compared to 8% in Texas.”

Andrew F. Puzder, CEO of CKE Restaurants, headquartered in California, offered telling insights from the employers’ perspective in this recent op-ed in the Sacramento Bee.

“Tame the lawyers,” Puzder urges California policymakers.  “With some 200,000 lawyers, California needs to put some limit on their ability to file class action lawsuits as though each one were his or her own, private attorney general. Like many California businesses, our company has wasted $20 million defending such cases in the last eight years, with a majority of that money going to the attorneys’ pockets.”

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