U.S. Chamber President: California's Legal Climate Hurts America's Competitiveness

WASHINGTON, D.C.—The U.S. Chamber of Commerce and the National Chamber Litigation Center hosted a day-long conference in San Francisco today to examine the state's lawsuit-friendly environment and its impact on jobs, healthcare, capital formation and the business climate. The forum, titled "Litigation in California—It's Everybody's Business," brought together state Attorney General Edmund G. Brown, Jr., Chamber President and CEO Thomas J. Donohue, and others to discuss the challenges recent legal developments in California pose to both in-state and out-of-state companies.

"In a competitive world, decision-makers at all levels of government must understand that there is a clear link between any economy's legal climate and its ability to attract business, jobs, and investment," said Thomas J. Donohue, Chamber president and CEO. "California has become a breeding ground for frivolous lawsuits, excessive damage awards, and abusive trial lawyer and prosecutorial tactics. This is hurting the economic competitiveness of the state and our nation."

Plaintiffs' attorneys file hundreds of lawsuits in California on behalf of non-resident plaintiffs, a phenomenon called "litigation tourism," according to the Chamber. State juries are granting increasingly large awards, with the average jury award in California tort cases growing 144% from 1996-2001. In a survey conducted earlier this year by Harris Interactive for the Chamber's Institute for Legal Reform, California was ranked 45th among the 50 states in terms of the fairness of its legal environment.

In his address, Donohue pledged that the National Chamber Litigation Center, the Chamber's public interest law firm, would continue to increase its level of legal advocacy in the state, entering cases of significance to business and legally challenging California regulators and elected officials when they overstep their authority.

"California has led our nation in so many respects," said Donohue. "It's time for the Golden State to now lead America away from a legal environment where the lawyers replace the legislators, where lawsuits replace laws, and where legalized extortion replaces the due process rights guaranteed by the Constitution of the United States."

The U.S. Chamber is the world's largest business federation, representing more than 3 million businesses and organizations of every size, sector and region.

Donohue's speech can be viewed at: http://www.uschamber.com/press/speeches/2007/071016_litigation.htm

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