SACRAMENTO, Calif. (Legal Newsline)-California's treatment of civil litigation makes it one of the worst legal climates in the nation, a survey of top corporate lawyers indicates.
The Harris Interactive survey released today found that California's treatment of class action lawsuits, personal injury suits and contract litigation gives the Golden State a dreary litigation environment, which ultimately costs much-needed jobs.
The Harris survey asked 1,482 corporate lawyers and executives about various aspects of states' legal systems, including venue requirements, discovery, damage awards, jury fairness and judges' competence.
In each of the categories, California was in the bottom of states. In all, California ranked 46th in the nation for legal fairness, according to the survey.
Respondents ranked Los Angeles County's courts as the second worst in the nation for legal fairness, and San Francisco's courts as the sixth worst.
The Harris survey, taken from October to January, was commissioned by the U.S. Chamber of Commerce, which owns Legal Newsline.
The Chamber said in a statement that more than four class action lawsuits are filed every day that California superior courts are in session, and that the state's judges, especially in Los Angeles and San Francisco counties, certify class actions that are not certifiable in other states.
Moreover, out-of-state law firms have opened shop in California to file asbestos claims that would have been rejected in their home states.
"California needs more jobs, not more lawsuits," said Lisa Rickard, president of the U.S. Chamber Institute for Legal Reform. "With one of the highest unemployment rates in the country, California's legal climate is discouraging new businesses and new jobs at a time when the state needs them most."
California's poor legal environment has taken its toll on firms of all sizes, but particularly small businesses, Rickard said.
"Most small businesses operate on small profit margins. In an economic downturn, a single lawsuit against a small business may mean the difference between survival and closing its doors," she said.
Nationally, Delaware continues to have the best legal climate in the United States, while West Virginia still holds the distinction of having the most anti-business courts in the nation, the survey found.
Other states with the most favorable legal environments were North Dakota, Nebraska, Indiana, and Iowa. At the bottom of the list, along with California is Alabama, Mississippi, Louisiana and West Virginia.
Delaware has been ranked No. 1 in the annual survey for the past seven years, while West Virginia has placed dead last for four years.
Of the 1,482 corporate lawyers and executives surveyed this year for the Harris survey, more than two-thirds of respondents said a state's legal environment is a key factor in making strategic business decisions at their company, such as where to expand or locate.
Of respondents, 56 percent said they believe the fairness and reasonableness of state court liability systems in America is fair or poor, while 44 percent said they saw the system as excellent or pretty good.
The survey's margin of sampling error is plus or minus 2.5 percentage points. The study was conducted by New York-based Harris Interactive.
Highlighting how lawsuits cost local businesses, the Institute for Legal Reform announced Monday that it was starting a new national advertising campaign. The effort, dubbed "Jobs, Not Lawsuits," will include two-minute movie trailers on more than 300 movie screens around the country.
One of the spots features the story of Basketball Town, which was forced to close its doors in Sacramento, Calif., because of legal bills related to a lawsuit.
In 2007, the facility was sued by a man who attended a birthday party there with his nephew. The man filed a disability access lawsuit because the area where the birthday party was held was not wheelchair accessible.
"The silver screen is the perfect place to tell these true stories of businesses that have been victimized by an unfair legal system," Rickard said. "We want people to see the real life consequences of these lawsuits."
For the State Liability Systems Ranking Study, Harris Interactive surveyed general counsels and senior attorneys or executives in companies with annual revenues of at least $100 million.
From Legal Newsline: Reach staff reporter Chris Rizo at chrisrizo@legalnewsline.com.