COME FOR THE TAX BREAK, STAY FOR THE COURTS?

If you’ve had experience with our court system, I’d bet you a cafecito that a major sticking point to achieving a utopian vision of a true business haven is our literally and figuratively crumbling judicial infrastructure.

By Etan Mark for The Daily Business Review | January 15, 2020

With our beautiful weather, international access and great tax environment, why isn’t South Florida a genuinely optimal jurisdiction for a mature business? If you’ve had experience with our court system, I’d bet you a cafecito that a major sticking point to achieving a utopian vision of a true business haven is our literally and figuratively crumbling judicial infrastructure.

Recent surveys of the South Florida judicial landscape have not painted a pretty picture. In a recent, widely publicized “2019 Lawsuit Climate Survey: Ranking the States,” released by the U.S. Chamber Institute for Legal Reform, Miami was ranked as having one of the worst legal climates for businesses in the United States, ranked 46th in the nation. For those of us who practice in these courts every day, it is not hard to see why. On the state level, we have an underfunded and overworked judiciary. There are too many cases and too few judges. The judges we do have are underpaid and drowning in their massive caseload. From 2016 through 2018, there were more than half a million civil lawsuits filed in the state of Florida. In 2017 to 2018, over 180,000 new civil lawsuits were filed, with more than 40% filed in Miami-Dade, Broward and Palm Beach counties. To handle the 180,000 new lawsuits, South Florida relies on the 52 circuit civil judges currently presiding, roughly equating to 3,500 new cases per judge, per year. The number of judges appointed to handle this massive caseload has not measurably increased and legislative appropriations to state courts have been relatively flat (despite the fact that these courts generate hundreds of millions of dollars in revenue for the state in filing fees). A trial judge in South Florida is paid as much as one in north Florida, although the cost of living and caseload disparity is significant. The nearly 100-year-old Miami-Dade courthouse is literally falling apart, a problem our community has finally taken the first step in rectifying by approving its construction a few weeks ago.

And while a new courthouse is an important step, our politicians need to address the bigger problems: we need more judges and we need to reward them for their commitment to public service by paying them appropriately. Attracting high-quality attorneys to become judges is a lot harder when a judgeship means a 50% pay cut (while spending hundreds of hours every election cycle fundraising and campaigning). We can’t be surprised in this current environment when some of our strongest judges leave the bench to become private mediators at $500 or more an hour.

One would think that our politicians would be motivated to prioritize improving the guts of our judicial system. Local legislators are pulling out all of the stops to attract new business to South Florida, which has become measurably easier due to our favorable tax environment. A few months ago, national publications reported the inroads Miami’s Downtown Development Authority has been making to lure Chicago business to South Florida in response to Illinois’ increased taxes. Carl Icahn is moving his $9 billion dollar hedge fund from New York to Miami next year. There has been a 95% increase in SEC registered investment advisers in South Florida between 2014 and 2018, and more than 70 financial services companies have moved to Palm Beach County in the past three years. While this makes the area an ideal professional hub, local business leaders and politicians will need to pay more attention to the state of our courts to ensure continued growth. As the number of businesses in the area grows, so will the number of disputes.

If our friends in Tallahassee cared about attracting more business to the state, they would pay more attention to what happens when businesses fight. Clients and attorneys are understandably frustrated when it takes five years to get a trial date or four months to get a 30-minute hearing before a judge. Most of our judges operate without law clerks, yet are expected to digest mountains of paper every day while resolving nine-digit dollar disputes among sophisticated businesses. Our judicial infrastructure will need to expand in order to service growing legal business needs in the area. If companies are unhappy with the local judicial system, their infatuation with the tax relief may be short-lived. There is no reason why Florida should routinely rate as a “judicial hellhole.” We have the talent on the bench. We have the resources in the government. These new businesses we’ve worked so hard to attract may be in for a rude awakening if our legislators don’t start prioritizing—now—a healthy future for our courts and judges.

 

Etan Mark is co-founder of Florida boutique litigation law firm Mark Migdal & Hayden. A commercial litigator, he serves clients in multiple jurisdictions involved in complex business disputes. His clients include public and private companies, real estate developers, investors and owners, tech entrepreneurs, gaming operators, family offices, hotels and banks.

 

By |2020-01-17T18:43:37+00:00January 15th, 2020|MEDIA|Comments Off on COME FOR THE TAX BREAK, STAY FOR THE COURTS?

About the Author:

Mark Migdal & Hayden is a commercial litigation law firm, based in Miami, Florida.