Business-killing cuts to state court systems

Frank P. Cross, the business law professor from Texas, said he sees how these barriers to the courts could make businesses think twice about seeking litigation, even for cases that have clear merit. If budget cuts continue, Cross said, this chilling effect will become more widespread, adding, “I don’t think it’s that bad — yet.”

But perhaps it already is in Birmingham, Alabama. Presiding Judge J. Scott Vowell of Jefferson County said that this year he has observed a sharp drop in civil cases filed. The number is down by about 30 percent from last year, and he attributes it to the delays and higher costs. “Normally in hard times economically we would expect an increase in new case filings — you have more mortgage foreclosures and collections on credit cards and increased collection on debts. But we’re not seeing these cases,” he said. Judge Vowell thinks such disputes are as common as ever, but that people are avoiding court. And this worries him. “I don’t think it’s a good thing to not have a jury of their peers to decide their disputes,” he explained. “That’s central to a democratic government.”

No help from “business-friendly” state legislators

Michael Bennett, a Republican state senator in Florida who sits on the state’s budget committee, and serves on its subcommittee on criminal and civil justice appropriations, holds himself out as pro-business. On his website, he explains that this was a motivation for his seeking office: “I saw the government putting up roadblocks to business and felt I could make a difference.”

But, despite Florida’s courts experiencing reduced operating hours, increased fines and backlogs, and staff layoffs, Sen. Bennett doesn’t think the courts are underfunded. Neither does he believe that court delays in resolving business disputes present an obstacle to attracting business to the state. Bennett said that he has experienced court delays in connection with his own businesses, but insisted that those delays were due to poor docket management and judges’ lenient granting of extensions to lawyers, not lack of funding.

In Alabama, State Senator Paul Sanford, who represents Madison County, is another pro-business advocate. Sanford’s most recent campaign website stated that Alabama must “aggressively [compete] with other states to bring new industry to our state through tax incentives and other perks so that Alabama will remain a breeding ground for business opportunity and job growth.”

Sen. Sanford, who chairs the Job Creation and Economic Development Committee, insisted that court delays don’t impede the state’s economy. He didn’t deny that delays exist and that they could create difficulties for companies, but said he was not personally aware of particular businesses suffering from the problem.

Sen. Sanford acknowledged that courts serve a vital government function, and said he believes that his state’s courts need more funding. But he also said the courts need to cope with budget cuts via belt-tightening and seeking even greater efficiencies.

Judge Vowell was less sanguine, describing a sense of desperation his colleagues have had about the imposed cuts. The resistance of lawmakers to increased taxes to fund the courts, he said, “is a reflection of this attitude that government is bad and taxes are bad, that we can get needed government services without paying for them.”

Judge Vowell said he couldn’t imagine what additional belt-tightening Sen. Sanford was referring to. “I’ve told people if they can find any waste I’d sure like to know about it,” he said.

Tom Harman, a Republican state senator representing Orange County, California,  who received a “Legislator of the Year” award in June, 2012 from the California Business Properties Association, took a more nuanced view than his legislative counterparts in Florida and Alabama. Harman did see functioning courts as vital to business. “It does rank pretty high when a business is thinking about either relocating to California or leaving California,” Sen. Harman said.

In Harman’s view, the state bears responsibility for adequately funding the courts. He also acknowledged that California state courts need more money, and that the legislature currently isn’t providing enough.

But, he said, that money should be diverted from other programs and agencies rather than from increased revenues. “I’m opposed to raising taxes,” he said. “I think there’s a good argument that other departments, other agencies could cut back their spending substantially.”

A different view comes from California State Senator Loni Hancock, a Democrat who chairs the budget subcommittee on corrections, public safety and the judiciary. “I look at the state budget, which has steadily decreased during my entire 10 years in the state legislature, and I say there’s nothing left to cut,” she said.

Sen. Hancock said she believes the courts should be fully funded, and taxes should be raised to fulfill that goal. “I have seen people stand up on the floor of our legislature and say, ‘You can spend your money better than government can.’ Well, yes, maybe so — if you don’t need a court system. Or you don’t need a great university. Or you don’t need a good public school for your kids,” she said. “But if you do need all those things that’s why we pool our money together to buy those things, and that’s called paying taxes.”

Additional reporting: Samantha Cook