Florida and Texas lead the nation in economic growth. They also lead the nation in civil justice reform. Pundits rarely connect these two facts, but the trial lawyer lobby certainly has. The coalition that profited from the old, litigation-heavy status quo hasn’t disappeared; it has just changed tactics and is now working through statehouse politics to claw back what tort reform took away.
The legal climate both states enjoy today was not built overnight. Texas laid its foundation with the 1969 Tort Claims Act, which defined the terms under which the state’s government could be held liable for wrongdoing, and continued through the 1995 Tort Reform Act’s proportionate-responsibility and punitive-damages standards. The 2003 omnibus reform embodied in House Bill 4 and Proposition 12, along with the 2011–2013 sequence of House Bill 274 and Texas Rule of Civil Procedure 91a, allowed courts to dispose of baseless claims before they consumed years of costly discovery.
Florida took a parallel path: the 1986 Tort Reform and Insurance Act introduced pure comparative negligence, the 2006 repeal of joint and several liability tied a defendant’s exposure to its actual share of fault, and the 2023 passage of House Bill 837 shifted the state to modified comparative negligence, curtailed one-way attorney fee provisions, and established new standards for bad-faith insurance claims.
These states didn’t outlaw lawsuits; they made legal outcomes fair and predictable. And predictability is exactly what capital investment demands before establishing roots.
You can see the payoff in the headlines. The results are visible in real corporate decisions. Citadel moved to Palm Beach and Palantir to Miami — moves Gov. Ron DeSantis explicitly tied to the state’s legal climate. Last April, Gov. Greg Abbott met with DeSantis in Miami to champion this new Southern “Boom Belt,” while the Dallas-based Texas Stock Exchange, known as “Y’all Street,” began continuous trading this July.
None of this happens in a legal vacuum. Businesses price litigation risk just as carefully as taxes or labor costs when deciding where to establish operations, and Florida and Texas have spent decades lowering that risk and associated costs through statute.
That progress is now facing organized political resistance. The Florida Justice Association, the trial bar’s primary advocacy arm in the state, has directed substantial resources toward the state’s Democratic Party and allied PACs while simultaneously making targeted contributions to individual Republican legislators, including one lawmaker who received a contribution within days of filing bills to weaken existing reforms.
In Texas, plaintiffs’ firms have taken the unconventional step of funding candidates and political organizations across party lines to soften support for tort reform within the Republican legislative majority. While neither effort has repealed the core reforms outright, both illustrate that the threat to the Boom Belt’s legal foundation increasingly runs through campaign finance and legislative maneuvering rather than open floor debate.
This back-door influence extends into the courtroom itself through third-party litigation financing (TPLF). What was once a niche practice is now a $15 billion industry, projected to top $50 billion by 2035. Because neither state requires meaningful disclosure, foreign financiers can bankroll American lawsuits from the shadows through TPLF. This is not solely a question of civil justice; it carries genuine state and national security implications.
Florida’s SB 1396, which would have required disclosure of these financing arrangements, passed the Senate Rules Committee in early 2026 but died without a House hearing. Texas has seen similar disclosure proposals stall in committee across multiple sessions.
Florida and Texas did not arrive at their current standing by accident, and complacency will not sustain it. Both states made a committed, decades-long choice to prioritize legal predictability alongside economic opportunity, and the corporate relocations and capital projects now taking shape in those states are the direct return on that investment.
The Boom Belt is a competitive advantage, not an inherited right, and preserving it requires the same vigilance that built it: resisting efforts to revive one-way attorney fees or expand liability without corresponding limits, and bringing basic transparency to third-party litigation financing before the industry’s scale outpaces the states’ capacity to oversee it.
Capital goes where it is welcome, and it leaves the moment legal risks outweigh the reward.
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Doug Wheeler is the director of the George Gibbs Center for Economic Prosperity at The James Madison Institute.
