When choosing San Antonio as the location for its first U.S. headquarters, global data technology leader Okin Process recognized the competitive business advantages found only in Texas. And it is in good company.

Texas has earned the Best State for Business title for a record 17 years in a row from the Chief Executive Group. The nation’s leading CEOs cite our pro-growth economic policies — with no corporate income tax and no personal income tax — along with our young, growing and diverse workforce, easy access to global markets, robust infrastructure and predictable regulations.

It’s no surprise then that four Texas cities are among the nation’s top 10 best cities to start a business, according to WalletHub.

The business advantages found only in Texas grow more than the bottom line. Freed from the stranglehold of overtaxation and runaway regulation, new ideas flourish here.

As I talk to innovative job creators each week, they point to that freedom and our welcoming business climate as the Texas advantages that allow their companies to grow and their employees to succeed, to afford a home and to enjoy a high quality of life.

Those unmatched advantages are why “Made in Texas” is such a powerful global brand. Texas is the top exporting state, now for 19 years in row, and the top tech-exporting state, now for eight years in a row, based on an analysis of census data, beating second-place California in both.

Those unique Texas advantages are why the Lone Star State also leads the nation in attracting capital investments and relocation and expansion projects, including 223 new corporate headquarters since 2015, with more announced this year than any other year — and more yet to come.

And those advantages are the reasons why Texas is growing while states such as California, New York and Illinois lost population last year. People vote with their feet, and Texas is the top vote-getter when it comes to business.

There are now 29 million Texans and counting, and almost half of our population growth is made up of newly born Texans. They represent a continuing strong workforce, as Texas is by far the stickiest state: More than 8 in 10 born in Texas stay in Texas.

Businesses are drawn to this growing and skilled talent pool. Okin Process is joined by tech giants — like Apple, Amazon, Google, Microsoft and Wipro — that are investing in and growing major operations across the state.

With nearly 370,000 professionals directly employed in the industry, Texas is now the top state in the nation for tech worker migration, with Houston and Dallas-Fort Worth both beating out Silicon Valley. San Antonio has the highest concentration of cyber and intelligence employees outside of the D.C. area. And Austin is where entrepreneurs scale their ideas into Fortune 500 companies, like Michael Dell, who founded Dell Technologies from his college dorm room.

As a testament to the state’s synergies with leaders in technology and innovation, the U.S. Army selected Texas as home for its new Army Futures Command, which focuses on science and technology development for the U.S. Army.

From San Antonio to Austin, Houston, Dallas-Fort Worth and beyond, Texas offers ample room for businesses of all sizes to grow — and succeed.

In fact, across every region of Texas, innovative startups are growing alongside the world’s biggest brands, including nearly 50 Fortune 500 corporate headquarters, hundreds of publicly traded firms and more than 2.8 million small businesses.

We are seeing increasing business investments in our urban centers as well as our smaller communities. And our local, regional and statewide economic development teams continue to partner to develop local business, attract new business and retain the talent that fuels continuing economic expansion.

There are more than 29 million reasons why Texas works. And one Texas advantage tops them all: We want businesses to succeed in Texas, because when businesses succeed, all Texans succeed.

Greg Abbott is the governor of Texas.

As advocates for small business, the San Jose Chamber of Commerce continues to work on the safe reopening of our economy so we can get our residents, neighbors and friends back to work. San Jose businesses have been hit hard by the economic slowdown related to the ongoing COVID-19 pandemic and those challenges continue, but the threats to small business will not stop just because COVID is behind us—and we need to be prepared.

Before COVID-19 became a household name, frivolous lawsuits were already a huge threat to our local economy. Regionally, we have seen some small businesses close their doors because of lawsuits whose goals were more about attorney profits than they were about public safety. Now, our community needs protection against future lawsuits aimed at shaking down family-owned businesses.

In 2017, our neighboring state of Arizona passed SB 1406, legislation which provided business owners a 30-day right to remedy before a lawsuit could be filed. This legislation is a win-win for Arizona residents and the economy; the issues around safety and access are addressed, without the undue burden of lawsuit settlement costs placed on employers. In this competitive market for jobs, California should follow suit.

The first week of October is Lawsuit Abuse Awareness week, and now is a great time to highlight this important issue and to call on the California Legislature and Gov. Gavin Newsom to support small businesses and protect them from these abusive lawsuits.

Business owners deserve certainty of liability protection. They are dedicated to the welfare and safety of their employees and customers, but they also want certainty that a lawsuit won’t drive them into bankruptcy and out of business.

There are nearly four million small businesses in California, and together they employ more than seven million workers. In San Jose, 98% of businesses have less than 35 employees. These are the preponderance of victims of frivolous lawsuits, and they are the voices we would expect our elected leaders to listen to when making policy for our city, region and state.

Unnecessary litigation caused by the American Disabilities Act, Prop. 65 and the Private Attorneys General Act will have lasting impacts on small businesses and jobs in San Jose. Unless our leaders take a stand for those that employ so many, the path to financial security that entrepreneurship provides will be lost for many more at the hands of abusive lawsuits.

Derrick Seaver is the president and CEO of the San Jose Chamber of Commerce.

Earlier this week, the Wall Street Journal published an editorial decrying the House of Representatives massive, 2,000-page budget bill, claiming that it will raise taxes on businesses while subsidizing lawsuits against them.

“By reducing trial lawyers’ legal costs, [the bill] would effectively subsidize contingency-fee cases. Lawyers will be more likely to file dubious lawsuits and drag out cases if they can immediately deduct their expenses,” the editorial reads in part, calling this component of the bill “a direct income transfer to plaintiffs’ lawyers….”

According to the editorial, under current practice, the IRS generally bars lawyers working on contingency-fee cases from deducting expenses such as depositions, expert testimony, and discovery until a case resolves. In most contingency-fee arrangements, attorneys front the costs of a lawsuit in return for some share—usually 30% to 40%—of the client’s eventual settlement or award. Under the House budget bill, trial lawyers would be allowed to deduct contingency-fee expenses – which would cost $2.5 billion over a decade, according to the Joint Committee on Taxation.

As the editorial points out, the IRS has long treated contingency-fee expenses like non-deductible loans because a winning case results in those expenses being repaid. In the event of losing a case, the IRS has allowed attorneys to write off those expenses. But under the proposed bill, trial attorneys would be allowed to deduct contingency-fee expenses “disregarding the possibility that such amount will be repaid.” The bill also says that “income attributable to any related recovery shall not be reduced by such amount.”

American businesses have spent almost two years facing a pandemic and worker and supply shortages, and now they face the possibility of government-subsidized lawsuits. Congress must not pass this “tax break for trial lawyers” and instead provide businesses across our nation a chance to recover.

The House Democrats’ 2,100-page budget bill is chock full of goodies for liberal special interests, and one of the worst is a tax break for their dear friends in the plaintiffs bar. While raising taxes on businesses, Democrats want to subsidize more frivolous lawsuits against business.

The IRS generally bars lawyers working on contingency-fee cases from deducting expenses such as depositions, expert testimony and discovery until a case resolves. In contingency-fee arrangements, attorneys front the costs of a lawsuit in return for some share—usually 30% to 40%—of the client’s eventual settlement or award.

Under longstanding IRS rules, these expenses are treated like non-deductible loans to clients since they may eventually get reimbursed at the end of a case when their client settles or wins. In the rare case there’s no recovery, they can write them off like a bad loan.

Tax courts and federal appellate courts have consistently upheld this interpretation dating to the 1930s. The Ninth Circuit Court of Appeals in 1995 created a carve-out for a certain type of contingency contract. But the IRS has limited this interpretation to states in the Ninth Circuit, which is a mecca for contingency-fee lawsuits.

Under the House bill, trial attorneys nationwide would be allowed to deduct contingency-fee expenses “disregarding the possibility that such amount will be repaid.” The bill also says “income attributable to any related recovery shall not be reduced by such amount.’’ The deduction would cost $2.5 billion over a decade, according to the Joint Committee on Taxation.

By reducing trial lawyers’ legal costs, it would effectively subsidize contingency-fee cases. Lawyers will be more likely to file dubious lawsuits and drag out cases if they can immediately deduct their expenses. This is a direct income transfer to plaintiffs’ lawyers, who will turn around and finance Democratic election campaigns. It’s the definition of a corrupt political bargain.

The Texas economy is strong because policymakers trust employers to run their businesses in ways that grow jobs and maintain a productive workforce. A healthy workforce results in a more productive workforce, and the ongoing pandemic reminds us how quickly illness can impact the global economy — resulting in slowed manufacturing, the inability to get goods to consumers, job losses and lost tax revenue.

As we continue to navigate the pandemic, Texas policymakers must allow Texas employers to decide their own best practices to maintain workplace health and safety. To do otherwise would establish a concerning precedent of state interference into determining what workforce health and safety policies are best, without regard for a particular industry’s needs or the differences in manufacturing work environments.

Elon Musk seemed strangely casual in dropping the biggest news to come out of Tesla’s virtual shareholder meeting on Thursday afternoon. Streaming from inside the so-called Gigafactory the company is building in southeastern Travis County, on a raised dais in front of a red-and-white-painted manufacturing assembly line, the billionaire announced that Tesla is moving its headquarters from Palo Alto, California, to the Austin area. Musk—himself a newly minted Texan—didn’t offer much of a satisfactory explanation why.

He talked about how Tesla had outgrown its California factory, but that’s a reason to build a new factory, not move the corporate HQ. He noted that employees there are having a hard time affording houses and are facing long commutes. (Of course, Austin hardly offers the cheap living it once did.) Musk said also that there was a “limit to how big you can scale in the Bay Area.” He expects Tesla to continue growing, and he seems to believe that growth will prove easier in Texas.

Musk, wearing a black T-shirt and sporting a bandanna around his neck, heaped praise on the new Austin facility. He marveled that the sprawling facility—which will produce electric vehicles, including the Cybertruck—is so convenient to the airport (five minutes) and downtown (fifteen minutes). He promised to “create an ecological paradise” along the Colorado River, which runs alongside the Gigafactory property. Yet fifteen minutes from the factory to downtown is a little optimistic, even in ludicrous mode, and that stretch of the Colorado isn’t exactly some prelapsarian wonder, though it’s nice enough if you don’t mind the occasional pipeline buried in the muck.

There are other potential reasons for the move. For one, automakers sure like Texas. Toyota relocated its North American headquarters to Plano from the Los Angeles area in 2017. The Japanese company continues to grow its operations in San Antonio as well, with Navistar expected to begin making commercial trucks there next year. Meanwhile, electric truck maker Rivian is reportedly in talks to build a large factory outside of Fort Worth.

It’s also true that California companies have been flocking to Texas. The state’s low taxes, relatively affordable housing, tort reform climate, and ease of building have all contributed to the draw. Between January 2018 and June 2021, several dozen corporate headquarters relocated from the Golden State to the Lone Star State, spanning the alphabet from software company Aatonomy to the firm Zoho. Other notable arrivals: Silicon Valley heavyweight Oracle and Pabst Brewing. Musk has telegraphed Tesla’s exit from California for more a year. He famously clashed with Alameda County, California, officials in 2020 over reopening the company’s Bay Area factory amid the coronavirus epidemic. He threatened to move its headquarters to Texas or Nevada in a tweet in May 2020, beginning a public courting by Texas officials.

Let’s not discount as well that Musk seems to genuinely like Austin and Texas, having announced his own move late last year. (He’s said he’s mostly been living in a tiny home near the Boca Chica testing site of his aerospace company SpaceX.) Plus, as some on my Twitter feed have noted, he just ended a long-term relationship with Grimes and, apparently, moving to Austin after a big breakup is kind of cliché. 

But there are likely more significant reasons behind Tesla’s decision. Most people think of it as a car company, and the vast majority of its revenue (85 percent) comes from producing electric vehicles. Yet Musk has long declared that Tesla isn’t solely an automaker. “Tesla’s mission has always been tied to sustainability,” the company wrote five years ago, in announcing it would acquire solar energy company SolarCity.

“I think long-term Tesla Energy will be roughly the same size as Tesla Automotive,” Musk said last year. He’s moving an electric car company to a state that suffered a massive electric grid failure eight months ago. In his mind, that failure wasn’t a deterrent. It was an opportunity. Musk spoke at length this week about using Tesla batteries to stabilize grids and creating “a sustainable energy future.” Texas Monthly reported in August that Tesla had filed paperwork to begin selling electricity in Texas. And work on Tesla’s first large battery in Texas, outside of Houston, continues. What greater challenge is there than becoming an energy company that rethinks energy? If that’s where Tesla is headed, why not move to Texas? The state still lives and breathes the energy business.

Tesla’s ambitions continue to grow. A few minutes before announcing the headquarters move, Musk waxed philosophical about “the fundamental good of Tesla.” In his mind, that isn’t building the first mass-market electric vehicle or muscling in on the global automakers club. It is “by how many years did we accelerate sustainable energy. This is the fundamental, I think, way to think of the value of Tesla. And so if we are able to accelerate sustainable energy five more years, that is good. Hence the need to grow quickly.” 

This is the Musk mentality. Tesla is a force for good in the world, therefore it needs to grow quickly. So what better place to grow quickly than pro-growth, pro-business Texas? If Musk sees Tesla as a new kind of energy company, or at least a company ushering in a new era of energy, then it makes sense to be in Texas. Legendary oilman H.L. Hunt came to Texas to make his fortune, as did Lee Raymond (a South Dakotan), who made his mark on Exxon. If Musk wants to likewise stamp his likeness upon the energy industry, before departing for Mars, it makes sense to do it from Texas.

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(The Center Square) – As the exodus from California continues, Texas sees the most businesses relocating from California, a new Stanford University study shows.

Texas is beating every other state as a destination for California companies by a ratio of 4:1, according to the study by McKinney-based Spectrum Location Solutions and Stanford University’s Hoover Institution.

California company headquarter exits have more than doubled in 2021, study authors Joseph Vranich and Lee Ohanian write, noting, “Every month in 2021, twice as many companies are relocating their headquarters as in the prior year.”

“California is experiencing a serious loss of company headquarters to other states,” they said. “The phenomena, which includes business in nearly all industries, has gone virtually unrecognized by the state’s elected officials and governmental agencies.

“Unless policy reforms reverse this course, California will continue to lose businesses, both large established businesses, as well as young, rapidly growing businesses, some of which will become the transformational giants of tomorrow.”

In the timeframe analyzed, 265 California companies exited, with Texas receiving 114, followed by Tennessee receiving 89.

Texas Gov. Greg Abbott said of the findings, “Our business-friendly climate, with no corporate or personal income tax, along with a young, skilled and diverse workforce, easy access to global markets & predictable regulations attract businesses to Texas from across the nation and around the world. That means jobs!”

The majority, 57, moved to the Austin area. The next largest group, 47, relocated to North Texas, primarily in the Dallas, Fort Worth and Irving areas. Nine moved to Houston; six to San Antonio.

The majority of California companies left San Francisco and Los Angeles, followed by a range of other cities.

The authors of the Spectrum/Stanford report point to several factors contributing to businesses leaving the state. They include California’s real estate taxes that impose strains on business owners, the state’s litigious climate and need for tort reform, a “Sue Your Boss Law,” regulatory burdens and bureaucracy, labor costs and regulatory burdens associated with them, as well as high workers’ compensations costs, high energy costs, and several other factors.

The findings support previous findings by other companies and publications over the years. For 17 years in a row, Texas has ranked first by Chief Executive’s Magazine’s Best and Worst States for Business ranking. This year, California once again ranked last.

The Tax Foundation’s 2021 State Business Tax Climate Index ranked California 49th, highlighting policies that continue to increase income taxes, property taxes, and sales taxes on top of increasing county and municipal taxes and fees, as factors for leaving.

The Small Business & Entrepreneurship Council’s 23rd annual report, which analyzed how state policies affect entrepreneurship, small businesses, and the economy, ranked Texas first and California 49th.

Its president and CEO, Karen Kerrigan, said, “States that provide better business environments and continuously improve their policy climates are in the best position to attract new investment, entrepreneurs, and business relocation opportunities. People are also moving to these low-cost, business-friendly states, which provides for a ready workforce.”

One of the latest California companies to announce it was leaving was Los Angeles-based engineering giant AECOM. It’s relocating to Dallas.

Other California companies relocating to Dallas include Wiley X, a military-grade eyewear company, First Foundation Inc., a financial services firm, and MD7 LLC, a mobile infrastructure consulting firm.

Last year, nearly 70 companies relocated or expanded to the Dallas-Fort Worth area, the Dallas Regional Chamber reports, with 50 more relocating this year.

So many people and companies have relocated to Texas in the last decade that Texas gained two additional Congressional seats and California lost one after the 2020 Census. California also reported the first ever population decline in the state’s history in 2020.

Our regular readers will recall our extensive coverage of the patent troll problems in the Western District of Texas, but it’s fair to say patent trolls find fertile ground in courts across the Lone Star State.

As the Allen American recently reminded us, fifteen years ago the late Supreme Court Justice Antonin Scalia called the Eastern District of Texas a “renegade jurisdiction.” And, as Garrett Gravely writes in the Allen American, the Eastern District remains “a hotbed for frivolous patent infringement litigation.”

Sure, you may not see the Eastern District in the news quite as often these days, following the Supreme Court’s 2017 decision in TC Heartland v. Kraft Foods that made forum shopping more difficult. But the district, which includes several counties in North Texas and the Dallas-Fort Worth Metroplex, remains “one of the most prolific patent litigation venues in the federal judiciary.” More than 200 patent infringement lawsuits were filed in that district just this year, with defendants ranging from Dallas-based AT&T to Cracker Barrel and Samsung and Chick-Fil-A.

And the continued flow of patent troll cases in the Eastern District has grabbed the attention of a high-profile Metroplex resident, too. Maybe you’ve heard of him? Mark Cuban.

Cuban talked with the Allen, Texas local paper, to say the patent trolls aren’t stupid. They’ve found an opening in the Eastern District of Texas and a jurisdiction welcoming their claims.

“I can only tell you from the outside looking in that it appears to be a great industry for EDTX. It’s actually smart on their part. It’s not their fault that patent laws are ridiculous and sometimes not in [the] interest of the country.”

This isn’t the first time that Cuban, the outspoken entrepreneur, owner of the Dallas Mavericks owner, and Shark Tank Star, has blasted patent trolls and worked to expose and defeat them.

In 2013, Cuban endowed a chair at the Electronic Frontier Foundation (EFF), dubbing it the “The Mark Cuban Chair to Eliminate Stupid Patents.”

And, he was blunt back then too, talking about why he’s involved in the patent troll fight. He pulled no punches when he talked to Tech Crunch, saying:

“Because dumbass patents are crushing small businesses. I have had multiple small companies I am an investor in have to fight or pay trolls for patents that were patently ridiculous.”

We’re right there with you, Mark. Patent trolls are crushing small businesses.

Entrepreneur reminds us that “more than 50 percent of businesses targeted by patent trolls make less than $10 million in revenue per year and 75 percent are privately held.”

Help us shine a light on these “renegade jurisdictions” and expose the threat patent trolls pose to America’s innovators and job creators.

The Editorial Board, The Sun

Walt Disney Company is joining the long list of companies sending large numbers of jobs out of California.

Last Thursday, it was announced that 2,000 professionals working in fields such as digital technology and finance would be shifted to Florida.

If anyone is puzzled about why a company like Disney would do this, they haven’t been paying attention.

“Florida is known for its rich culture of hospitality and active lifestyle as well as a lower cost of living with no state income tax,” wrote Josh D’Amaro, chairman of Disney Parks, Experiences and Products in a letter to Disney employees. In other words, Florida has many of the advantages of California, but it’s a more affordable place to live and do business.

On a similar note, D’Amaro  cited Florida’s “business-friendly climate” as a consideration. To that point, California’s reputation for being unfriendly to business is well-established.

CEOs surveyed by Chief Executive Magazine consistently rank California the worst state in the country to do business.

The U.S. Chamber Institute for Legal Reform has consistently found that businesses perceive California as having among the most difficult legal environments to conduct business in.

And of course California’s tax and regulatory environments are infamous.

Just this year, the nonpartisan Tax Foundation ranked California 49th on its 2021 State Business Tax Climate Index, better only than New Jersey. In 2019, researchers at the Mercatus Center noted that California’s Code of Regulations consisted of 395,129 restrictions. In practice, it doesn’t get much clearer than how California and Florida treated Disney with respect to theme parks. While Florida allowed Disney World to reopen in July 2020, California barely issued guidance to theme parks like Disneyland in March 2021.

There’s no doubt that California remains, for all the failings of its state government, a great state. But it unfortunately remains a state that makes it hard for many businesses to rationalize starting, staying or expanding here. Until state officials realize the counterproductive impacts of their economic policies, expect more businesses to consider investing elsewhere.

By Brendan Pierson

(Reuters) – Amazon.com Inc cannot be held liable under Texas law for injuries caused by a third-party seller’s product that the e-commerce giant shipped from its warehouse, the state’s highest court has ruled.

The 5-2 decision, handed down Friday in a case brought by the mother of a toddler who suffered esophageal burns after swallowing a remote control battery, puts Texas in line with most other states whose courts have considered Amazon’s potential liability for third-party sellers’ products.

Jeff Meyerson of The Meyerson Law Firm, a lawyer for the mother, Morgan McMillan, could not immediately be reached for comment. Nor did Amazon or its attorney Brendan Murphy of Perkins Coie.

McMillan sued Amazon in 2018, alleging a knockoff Apple TV remote sold by a Chinese third-party seller, Hu Xi Jie, was defective and allowed the battery to pop out. The remote was sold through Amazon’s “Fulfillment by Amazon” service, in which the company stores sellers’ products at its warehouses and then ships them to buyers.

U.S. District Judge Vanessa Gilmore of the Southern District of Texas granted McMillan summary judgment, finding Amazon was liable because it had placed the product in the stream of commerce.

On appeal, the 5th U.S. Circuit Court of Appeals certified the question of whether Amazon was liable under Texas law to the Texas Supreme Court. The case was argued in March.

Justice Brett Busby, writing for the majority on Friday, found that the Texas Products Liability Act’s definition of “seller” does not extend to Amazon in the context of third-party products.

The law defines a seller as a “person who is engaged in the business of distributing or otherwise placing, for any commercial purpose, in the stream of commerce for use or consumption a product or any component part thereof.”

Busby said that definition must be read in the context of Texas common law, which has been shaped by the Third Restatement of Torts. He wrote that the court had previously recognized certain non-sale transactions, such as leasing, as giving rise to liability, but “refused to extend liability to all persons or entities involved in the distribution chain.”

“In sum, we conclude that when a product-related injury arises from a transaction involving a sale, sellers are those who have relinquished title to the allegedly defective product at some point,” he wrote.

Justice Jeffrey Boyd dissented, joined by Justice John Devine. He wrote that, using the “common, ordinary meanings” of the words in the Texas statute, Amazon was “unquestionably” a seller of products sold through Fulfillment by Amazon, since it “completely controls” the transaction once a product is in its warehouse.

Lawsuits have been filed in courts around the country in recent years seeking to hold Amazon liable for defective products from third-party sellers.

Though most courts have ruled in Amazon’s favor, a California state appellate court last year ruled it could be liable for products shipped through Fulfillment by Amazon. The state’s highest court declined to review that decision.

The case is Amazon.com Inc v. McMillan, Supreme Court of Texas, No. 20-0979.

For Amazon: Brendan Murphy of Perkins Coie

For McMillan: Jeff Meyerson of The Meyerson Law Firm