You Can Run, But Can You Hide?

January 29, 2025

Let’s take a hypothetical case of Company A, based in California where state laws are quite strict, decides to relocate to another state like say Texas. What happens to any lawsuits or other legal issues that may have arisen before they moved?

Here is what online AI tells me:

Yes, a company that breaks the law in California can still be prosecuted in California, even if it moves to Texas. Here’s how this works:

1. California Still Has Jurisdiction

  • If the crime or violation occurred in California, then California retains jurisdiction over the case.
  • The fact that the company moved does not erase its past illegal actions.

2. Civil vs. Criminal Violations

  • Criminal Violations: California law enforcement and prosecutors can file charges and pursue legal action against the company or its executives, regardless of where they relocate.
  • Civil Violations: Regulatory agencies (e.g., California Attorney General, Department of Labor, or Environmental Protection Agency) can still pursue lawsuits, fines, or penalties.

3. Extradition & Interstate Cooperation

  • If company executives are criminally charged, California can request extradition from Texas (depending on the severity of the crime).
  • Texas generally complies with extradition requests for serious offenses.

4. Federal Enforcement May Apply

  • If federal laws were broken (e.g., fraud, securities violations, environmental crimes), federal authorities (FBI, SEC, DOJ) can prosecute nationwide, regardless of where the company moves.

5. Business Assets & Operations in California

  • If the company still does business in California, the state can impose fines, revoke licenses, or take legal action to seize assets located in California.

Conclusion

Moving to Texas does not absolve a company from legal consequences in California. The state can still pursue legal action, request extradition of executives, and impose fines or penalties for violations committed before the move.

So it’s good to know that Companies can’t evade the consequences of their actions by moving offices.

Photo by Wesley Tingey