Missouri's 2025: Pro-Business Reforms Clash With a Burdensome Legal System

Governor Mike Kehoe's administration has delivered meaningful pro-business victories for Missouri in 2025: repealing burdensome paid-leave mandates, investing in workforce development, slashing capital gains taxes, and reducing taxes on major industries. These are serious wins that position Missouri to compete for investment and talent. Yet even as the state advances these pro-business policies, Missouri's legal system remains a drag on the economy. Massive plaintiff-friendly verdicts, Missouri's notorious reputation as a "judicial hellhole," and the failure to pass meaningful tort reform are driving major employers away and deterring new investment. As Missouri closes 2025, it's clear that progress on policy is being undermined by legal challenge, and that truly fixing Missouri's economy requires confronting the trial lawyer lobby head-on.

The Wins: Missouri's Practical Pro-Business Leadership

Governor Kehoe has demonstrated a pragmatic, business-friendly approach to governance, and the results are visible in legislative victories that reduce costs for employers and improve the state's competitive position.

Executive Order 25-16: Workforce Development for the Future

Governor Kehoe issued Executive Order 25-16, realizing his Workforce of the Future Challenge to better align schools, higher education, and employers. The order directs the state education department to coordinate with business and industry to update career and technical education, expand work-based learning, and grow youth apprenticeships.

This is an important initiative for both small and large businesses requiring a more skilled labor force. It helps build the knowledge and skills of the workforce, which is crucial for attracting large businesses into the state. When employers have input into education policy and schools align curriculum with industry needs, everyone wins: students gain marketable skills, employers find qualified workers, and communities build a sustainable economic foundation.

HB 594: Eliminating Capital Gains Taxes and Broadband Expansion

House Bill 594, passed in July 2025, represents serious tax reform that signals Missouri's commitment to attracting capital investment and fostering economic development. The bill includes a provision allowing corporations to deduct 100% of their capital gains income.

Here's the economic impact: by effectively eliminating state tax on capital gains, the law lowers the cost of equity capital for Missouri companies, helping them finance expansion, equipment purchases, and hiring more competitively. This makes Missouri a more attractive location for larger investors, entrepreneurs, and fund managers, encouraging in-state investment in startups, real estate, and expanding businesses rather than shifting capital to other states.

The broadband sales tax exemption reduces upfront capital costs for broadband deployment, making it easier to expand access in rural and underserved areas. Such access is becoming critical for both large companies and smaller tech startups looking to capitalize on the big data revolution in agriculture. The ag tech market is already valued at $26 billion and expected to reach $74 billion by 2034 – a massive opportunity for Missouri.

HB 1041: Tax Relief for the Beverage Industry

House Bill 1041, signed by Governor Kehoe in 2025, reduces red tape and modifies regulations for America's alcoholic beverage companies, particularly Missouri's largest: Anheuser-Busch.

The law shifts costs and regulatory burdens to clearly benefit large brewers, alcohol distributors, and Missouri's wine industry. The additional research and development funds will increase the Missouri wine industry's standing among other states. The law also creates tourism gains for Missouri, as more than 300,000 people visit the Anheuser-Busch brewery and its famous Clydesdale horses each year.

Together, these legislative victories demonstrate that Governor Kehoe understands an important truth: pro-business policy isn't about favoring corporations at workers' expense. It's about creating conditions where businesses can invest, expand, and create jobs. HB 567, Executive Order 25-16, HB 594, and HB 1041 all reflect this principle.

The Setbacks: A Legal System That Punishes Business

Despite these policy wins, Missouri's economy faces a far more serious obstacle: a legal system that has become a liability for major employers. The state's reputation as a "judicial hellhole," massive plaintiff-friendly verdicts, and the failure to pass meaningful tort reform are driving businesses away and deterring investment.

The "Judicial Hellhole" Problem: Plaintiff-Friendly Judges and Frivolous Lawsuits

Missouri, particularly St. Louis, is widely known in the legal industry as a "judicial hellhole"—a place where plaintiff lawyers flock to file massive lawsuits thanks to plaintiff-friendly judges and low standards for testimony. 

The result of inaction? A continuation of costly delays in Missouri's legal system, damage to Missouri's economic competitiveness, and a judicial system tilted against employers. This poor legal environment drives up the cost of doing business and hurts the state's citizens. Yet plaintiffs' lawyers—a powerful lobby in Missouri—are prioritized over other constituents.

This is a critical issue because it directly undermines the pro-business policy work that Governor Kehoe and the legislature have accomplished. You can cut taxes, repeal regulations, and invest in workforce development—but if major employers face massive frivolous lawsuits in plaintiff-friendly courts, they'll relocate to states with fairer legal systems.

Monsanto's RoundUp Litigation Disaster

Monsanto, headquartered in Missouri, has faced continual RoundUp cancer lawsuits in state courts since 2015. These lawsuits alleged that RoundUp causes non-Hodgkin's lymphoma for some users. In May 2025, a Missouri appellate court affirmed a prior massive verdict totaling $611 million. Missouri's Supreme Court failed to take the appeal, leaving Monsanto with the unlikely option of the U.S. Supreme Court hearing the case.

This is just one of many ongoing large-scale product-liability lawsuits involving Monsanto in Missouri. Critically, many such suits, including this RoundUp case, are not being won on scientific merit. Such rulings are leading Monsanto to hasten a decision to stop making RoundUp, one of the most popular and effective herbicides in America.

These verdicts are driving a major Missouri employer to abandon products and scale back operations in the state. While it's not legislators' job to change court rulings, they absolutely have the power to change laws that make frivolous lawsuits easy to file. Yet Missouri's legal system remains plaintiff-friendly, and hostile to businesses.

HB 544/SB 14: Tort Reform Defeated by Trial Lawyers

In 2025, Missouri introduced HB 544/SB 14 would have protected Bayer's Missouri-based Monsanto division and other pesticide manufacturers from being sued for harm based on product use. The bill passed the House but failed to pass in the legislature after it died in the Senate.

Governor Kehoe blamed the defeat on the lobbying efforts of trial attorneys, who have made "tens of millions of dollars" off the lawsuits. Meanwhile, Bayer has laid off 12,000 employees due in large part to the RoundUp lawsuits.

This is the hard reality: legal-reform legislation would have saved many of those 12,000 jobs and brought economic stability to the state's companies and citizens. But the bill's defeat stems from the Missouri legislature's influence by deep-pocketed plaintiffs' lawyers, who have made millions from major class-action lawsuits tried within the state.

Plaintiffs' lawyers do not create jobs or a better economy for Missouri. They extract wealth through litigation rather than creating it through investment and employment. The defeat of HB 544/SB 14 represents a critical failure of political leadership; lawmakers chose the short-term political comfort of avoiding trial lawyer opposition over the long-term economic health of the state and its workers.

The Algorithmic Choice Proposal

In early 2025, Missouri's attorney general announced a proposed rule requiring large technology platforms to guarantee "algorithmic choice" for social media users, the first-of-its-kind rule affecting default ranking and recommendation systems from global social media companies.

Fortunately, AG Andrew Bailey quietly withdrew the proposed rule from consideration in September 2025. This was a win for common sense.

The proposed rule represents a rising and troubling trend in which state attorneys general attempt to over-exercise their powers under consumer protection statutes against Big Tech and artificial intelligence. Major platforms and large online businesses would have faced costly engineering changes, new disclosure and consent flows, and heightened enforcement risk, increasing operating and legal costs relative to smaller firms not covered or less dependent on complex algorithms.

Missouri's decision to withdraw the rule was prudent. Overregulating technology and AI through state-by-state mandates would have driven innovation and investment to other states.

What Missouri's 2025 Teaches Us

Missouri's 2025 is a story of genuine pro-business policy achievements shadowed by a legal system that remains a drag on the economy. Governor Kehoe has done impressive work: HB 567 repealed burdensome mandates, Executive Order 25-16 aligned education with employer needs, HB 594 eliminated capital gains taxes and expanded broadband, and HB 1041 supported major industries.

But these wins are undermined by Missouri's failure to address its legal system. The state's reputation as a "judicial hellhole," the $611 million RoundUp verdict that wasn't won on scientific merit, the 12,000 jobs lost because of litigation costs, and the defeat of meaningful tort reform all tell the same story: Missouri's legal system is a liability that offsets the state's policy advantages.

The lesson is stark: policy reform alone isn't enough if your legal system is stacked against business. States that want to attract and retain major employers need to do both—cut taxes and regulations AND ensure a fair legal system.

As Missouri heads into 2026, the state needs to complete the job. Governor Kehoe should make legal reform a centerpiece of his agenda. Missouri's workers and employers deserve a legal system that protects legitimate business interests and discourages frivolous lawsuits. Without it, even the best tax and regulatory policy won't be enough to keep major employers from relocating to states with fairer courts.

Because at the end of the day, what's good for business is good for Missouri—and the states that combine pro-business policy with pro-business legal systems are the ones that will attract investment, create jobs, and build sustainable prosperity for decades to come.