The Chamber Of Commerce's Study Targets Courts In Selected States

The Institute For Legal Reform (ILR) Is The Chamber's In-House “Tort Reform” Advocacy Group. This week ILR released its 2012 State Liability Systems Survey, which claims to rank the “legal climate” for businesses  in each state:

Lawyers for U.S. companies say California, Illinois and West Virginia have some of the worst legal climates in the country for businesses, according to a new survey released today by the U.S. Chamber Institute for Legal Reform (ILR).  Delaware, according to those surveyed, has the best legal climate for businesses. Seventy percent of the more than eleven hundred company general counsels and senior attorneys who participated in the survey said a state's lawsuit environment is likely to impact important business decisions at their company, including where to locate or expand their businesses. This number is up thirteen percent from the same survey conducted five years ago, before the recession. [“California, Illinois & West Virginia Rank Among Worst States in Lawsuit Climate Survey; Delaware Ranked Best,” 9/10/12]

The Survey Is Based On Interviews With Lawyers And Executives For Corporations With Annual Revenues Of Over $100 Million. From ILR's website:

The 2012 State Liability Systems Ranking Study was conducted for the U.S. Chamber Institute for Legal Reform to explore how fair and reasonable the states' tort liability systems are perceived to be by U.S. businesses. Participants in the survey were comprised of a national sample of 1,125 in-house general counsel, senior litigators or attorneys, and other senior executives who indicated that they are knowledgeable about litigation matters at companies with at least $100 million in annual revenues. [“State Lawsuit Climates,” accessed 9/11/12]

Some State Media Uncritically Repeat the Attacks...

The Chicago Tribune Warned “Legal Climate Clouds Business In Illinois.” From a September 10 article:

Illinois, along with California, Louisiana, Mississippi and West Virginia, are among the worst states in the country for businesses because of their legal climates, according to survey of corporate attorneys released Monday.

Two Illinois counties did not fare well in the survey by the U.S. Chamber of Commerce's institute for legal reform, either. Cook County was named the most unfair and unreasonable jurisdiction, and Madison County was named the sixth most unfair county. [Chicago Tribune, 9/10/12]

The Sacramento Bee Repeated The Chamber's Lament That California Courts Are “Havens For Class Action Lawsuits.” From a September 10 post:

California ranks 47th in the nation in its courts' “fairness and reasonableness” regarding business lawsuits, according to a poll conducted by the U.S. Chamber of Commerce's Institute for Legal Reform.

Not only is the state's legal climate as a whole ranked fourth worst in the nation, just ahead of Mississippi, Louisiana and West Virginia, but Los Angeles County has the second worst lawsuit climate among local jurisdictions and San Francisco fourth worst. Delaware, the legal home of many major corporations, ranks No. 1 in business legal climate. [Sacramento Bee, 9/10/12]

...Without Noting Flaws Of The Survey's Methodology.

Professor Theodore Eisenberg Of The Cornell University School Of Law Definitively Debunked The Survey In 2009 As “Substantively Inaccurate And Methodologically Flawed.” From a 2010 Huffington Post article by Joanne Doroshow, Executive Director of the Center for Justice & Democracy at New York Law School:

[I]t's worth examining just how intellectually dishonest and harmful to the country this “survey” is. Theodore Eisenberg, Professor of Law and Adjunct Professor of Statistical Sciences at Cornell University, severely critiqued this shoddy document last September. Here are just a few highlights:

• “The survey is methodologically flawed and provides little useful information for states assessing their liability systems or for businesses considering investment in states or in the United States. The survey lacks elementary social scientific objectivity and incorrectly characterizes state law. Objectively verifiable responses are correct less than 10% of the time. Respondents ignore legal rules and material events within states.”

• “The Chamber's survey violates the elementary principle that evaluation of legal system performance should be based on input from both sides to disputes,” noting the obvious: “asking only one side to a dispute about a system will yield biased results.”

• Compounding this bias is the fact that respondents are first told of the prior year's results, and are provided monetary incentives.

• Even when one of those states changes its laws to strip consumers or patients of legal rights (such as Alabama, Louisiana, Mississippi, Texas and West Virginia), these states continue to rank “low,” which is “consistent with evidence from other states that respondents know little about the states they rank.” [Huffington Post, 3/22/10]

State Supreme Court Justices Have Also Questioned The Expertise Of The Survey's Interviewees. From a 2010 Times-Picayune article:

“I strenuously object to the ILR's taking the opinions of just a few attorneys who may never have set foot in Louisiana and making pronouncements about our courts,” [Louisiana Chief Justice Catherine] Kimball said in a statement released this week. “Whether we're rated highly or poorly, this survey is not a valid measure of the efficiency or fairness of Louisiana's courts.”

The Chamber has conducted eight similar surveys since 2002, prompting Kimball last year to establish the Ad Hoc Supreme Court Committee to Study Perceptions of the Legal System. The committee, chaired by Kimball, includes representatives of the governor's office, the Legislature, the courts, unions, business and legal groups.

Kimball noted a study by Cornell University law and statistics professor Theodore Eisenberg, who said the Chamber survey “lacks elementary social scientific objectivity.” The respondents to the survey are not required to have any experience in the states they rank but only need to say they are “somewhat familiar” with a state, Eisenberg said.

“A person can be 'somewhat familiar' with a state's courts because of a single high-profile case or because of a novel or movie based in that state,” said Louisiana Supreme Court Justice Greg Guidry, who is on the ad hoc committee. “Those might be honest perceptions, but they have no validity.” [The Times-Picayune, 3/24/10]

Indeed, Problems With The Survey Have Been Apparent Since At Least 2004. Investigating Illinois' low ranking, Copley News Service discovered the survey's pollsters admit they have no “hard” data:

The Institute for Legal Reform, an affiliate to the U.S. Chamber, hired Harris Interactive to survey senior corporate lawyers throughout the country to [gauge] the perception of fairness in each state's legal system. In its third year, the survey talked to 1,400 lawyers - compared to fewer than 1,000 lawyers last year.

Humphrey Taylor of Harris Interactive said the survey is based on the individual responses of the lawyers because there is no hard data that can be used to measure the perceived fairness of a state's legal system. [Copley News Service, 3/8/04, via Nexis]

...And The Chamber Admitted In 2005 The Sample Set Was Not Uniformly Qualified To Participate In The Study, According To The Charleston Gazette. Pressed on the survey's methodology, the Chamber and its pollster have admitted the actual knowledge base for specific state courts in their survey is very small:

Critics of the study and the Chamber's goals were quick to present alternative arguments Tuesday. Some questioned the methodology of the study.

[Chairman of the Harris Poll Humphrey] Taylor and [U.S. Chamber president and CEO Tom] Donahue acknowledged not all of the 1,437 lawyers surveyed knew anything about West Virginia's courts. Taylor said “around 107” said they had direct knowledge of the state.

“You could argue that's a small sample, but what they keep saying is '49th, 49th, 49th,” " he said. [The Charleston Gazette, 3/9/05, via Nexis]

Some Local Media Are Accurately Reporting The Survey's Flaws

The Philadelphia Inquirer Pointed Out That The Survey Offers Biased View of State Judicial System. From a September 11 article:

The chamber's Institute for Legal Reform said Pennsylvania ranked No. 40 among the states when judged on the size of awards, administration of cases, competence of judges and rules permitting lawyers to choose favorable jurisdictions, among other criteria. Among cities, Philadelphia was ranked the fifth worst, with Chicago having the poorest rating.

The basic complaint: It is too easy to bring legal action against companies in Pennsylvania compared to most states.

[...]

Scott Cooper, president of the Pennsylvania Association for Justice, which represents the state's trial lawyers, sharply criticized the study, saying it offered a biased view of the state's civil justice system. He said that while business critics often point to excessive jury awards in Pennsylvania, the average is boosted by companies suing one another, not by individuals suing companies.

“Garbage in, garbage out,” Cooper said of the study. “There are more lawsuit costs from businesses suing businesses than from individuals suing businesses.” [The Philadelphia Inquirer, 9/11/12]

The Washington Examiner Reported New Critiques Of The Survey's Impartiality. From a September 10 article:

Businesses had generally low opinions of Maryland judges when it came to their impartiality, fairness and competence, ranking them 33rd in the country in all three categories. Baltimore County in particular has a reputation for courts that favor plaintiffs in civil cases and hand out large verdicts, said Bryan Quigley, spokesman for the Institute for Legal Reform, an arm of the chamber.

Just because a state has laws that ensure victims can seek retribution doesn't make them bad for business, said Sen. Jamin Raskin, D-Montgomery County, who sits on the Judicial Proceedings Committee and teaches law at American University.

“Nobody likes to get sued, but everyone wants to have his or her day in court if they get injured,” Raskin said. "I assume on this study, the best state would be one where businesses aren't held accountable for any tort they commit. That's not in any definition of fairness.

“We never know when we're going to be the plaintiff or the victim. We don't want laws that have the thumb on the scale.” [The Washington Examiner, 9/10/12]