California’s War on Business Harms Everyday Residents

It is no secret that California is becoming an increasingly difficult place to do business. With the highest state income tax rates in the country, steep commercial real estate prices and a complex regulatory framework that includes extensive environmental requirements and cumbersome labor laws, this stark reality has prompted many companies to flee the Golden State for more business-friendly pastures.

Since 2019, there have been several notable instances where business relocations have occurred. From tech companies such as Oracle to manufacturers such as Tesla to financial titans such as Charles Schwab, these relocations are not limited to one sector or one type of company and highlight ongoing concerns from businesses of all walks about operating conditions in California.

Such concerning trends should serve as a wakeup call for elected officials in Sacramento to change policy direction. But instead, political leaders across the state and their trial attorney friends continue to pursue actions to the detriment of the remaining businesses in the state.

Look no further than the climate lawsuits which localities up and down the state have undertaken against oil and gas companies. Trial attorneys working on contingency have been able to entice local leaders with promises of big awards and easy money, while at the same time carving out a tidy payday for themselves. Even worse, Attorney General Bonta has launched a similar lawsuit out of his office, all but acknowledging that this concerning legal trend is now official state policy. It is no wonder then, that oil giant Chevron decided to join the growing list of companies fleeing the state and relocated to Texas earlier this year.

No doubt the rapidly deteriorating business climate in California is a serious issue that must be addressed. But the stakes become even higher when the businesses facing such lawfare not only provide essential products and services to Californians, but also do so in a way that cannot be easily replicated if operations should be moved outside its borders, thus threatening to impair the quality of life for the residents previously served by those businesses.

Take waste management services, for example. The operators of Chiquita Canyon, a private landfill that takes in nearly a quarter of the waste generated in Los Angeles County every day, has found itself the target of various legal and political attacks that could ultimately result in its closure.

Admittedly the landfill is currently facing some serious issues. A rare chemical reaction is generating heat and pressure deep within a retired part of the landfill, even though the property was managed according to all state and federal guidelines. Surrounding communities have unfortunately been impacted with noxious odors and fumes, but the operators of the landfill are taking all the right steps to mitigate its impact while continuing to determine what additional measures might be implemented.

A multi-agency action team has been brought in to coordinate a comprehensive response and $9 million in resources have also been made available through a community relief fund to support impacted residents with financial assistance for temporary relocation and home-hardening. Unfortunately, these measures are deemed insufficient by the affected interests, who are now accusing each other of playing election-year politics with the matter.

There remains a concerted push to shut down operations in the active part of the landfill, even though its daily trash intake has no impact upon the ongoing thermal event. No fewer than five different mass tort litigation firms that have brought action against the operators of Chiquita Canyon landfill and Los Angeles County appears poised to renege on a 2022 agreement, which is critical to supporting continued operations at the landfill into 2025 and beyond.

These short-sighted actions not only send the wrong signal to businesses contemplating their future in California, but they could also negatively impact residents in many ways. Not only would they jeopardize the revenue stream that supports the aforementioned community relief fund, but they could also raise disposal costs for residents who are already facing inflationary pressures and erode the ability of LA country to continue to safely and effectively manage its waste.

Who knows, at the end of the day, maybe that result is in fact their ultimate objective.

In a series of editorials this year, the Los Angeles Times called on Californians to stop using landfills and ideally stop generating waste altogether in order to bolster the state’s fight against climate change. California already has an adversarial relationship with business in general, and its leaders are quickly developing a track record of using the levers of the legal and political system to achieve their environmental goals – however unrealistic or impractical – and to harass industries they deem to be undesirable. The legal attacks on the Chiquita Canyon landfill may just be yet the latest example of politicians and trial lawyers driving businesses from the state, while raising costs and further diminishing the quality of life for its residents.