WASHINGTON, April 22 /PRNewswire-USNewswire/ -- Tomorrow the U.S. Chamber of Commerce will release an updated "study" that supposedly ranks the best and worst state legal systems in America. The "study" is based on a survey of corporate defense lawyers from multi-million dollar corporations who are paid to avoid accountability for their misconduct and negligence. Nevertheless, U.S. Chamber touts this propaganda as fairly measuring the states' legal systems. The facts tell a different story.
In addition to their annual rankings, U.S. Chamber's Institute for Legal Reform plans to hold an event in Baton Rouge, LA, to highlight a separate survey on Louisiana business owners' attitudes on their legal climate. Despite the devastation caused by Hurricane Katrina, Louisiana's per capita personal income (PCPI) rose 27.8% from 2005, while the national change was only 5.6%.(1) In 2006, Louisiana called itself "the destination for business and industry," citing 48 new project announcements totaling more than $11 billion and an estimated 8,500 new jobs.(2) Employment figures have also returned to pre-Katrina levels.(3)
U.S. Chamber's Institute for Legal Reform has seven board members representing the insurance industry, including Allstate and State Farm. These insurance companies have raised premiums, avoided paying claims and refused insurance to those who need it most in Louisiana. When Allstate was investigated for threatening to cancel 5,000 policies, Louisiana Insurance Commissioner Jim Donelon said, "At best, it was a very ill-conceived and sloppy inspection program. At worst, they wanted off of those properties."(4)
Over the last seven years, American Association for Justice has tracked the half-truths and outright lies that appear in these legal rankings. Here are just some of the incorrect statements and third-party criticisms that have appeared:
U.S. Chamber's "Study" Is Misleading
-- U.S. Chamber's Own Pollster Admitted that There is No Way to Measure
the Fairness of a State's Legal System. Humphrey Taylor of Harris
Interactive, the polling firm that conducted the survey for U.S.
Chamber, admitted that there is no way to measure fairness of the
legal system in each state. According to the Copley News Service,
"Humphrey Taylor of Harris Interactive said the survey is based on the
individual responses of the [corporate] lawyers because there is no
hard data that can be used to measure the perceived fairness of a
state's legal system."(5) Nevertheless, U.S. Chamber has
mischaracterized the "study" as "rank[ing] the best to worst legal
systems in America."(6)
-- U.S. Chamber's "Study" Is Actually a Survey of Corporate Defense
Lawyers Working for Multi-Million Dollar Corporations. Instead of
attempting to measure the effectiveness of the civil justice systems
in each state, U.S. Chamber instead commissioned a poll of corporate
lawyers at companies with $100 million or more in annual revenues.(7)
These are the very same lawyers who work every day protecting and
defending large corporations when they take unfair advantage of
consumers and employees.
-- After Ranking West Virginia as Having One of the "Worst" Liability
Systems, U.S. Chamber's CEO and Pollster Were Forced to Admit that
Only of a Fraction of Those Surveyed Actually Knew Anything About the
State's Court System. When questioned about the methodology of last
year's "study" that ranked West Virginia as 49th in the list of state
legal systems, U.S. Chamber's CEO, Thomas Donohue, and the pollster
that conducted the survey, Humphrey Taylor of Harris Interactive, were
forced to admit that only a fraction of the corporate lawyers surveyed
actually knew anything about West Virginia's courts. According to the
Charleston Gazette, "Taylor and Donahue [sic] 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."(8)
-- Florida Newspaper Criticized U.S. Chamber for Mischaracterizing the
"Study" in a Television Ad. According to the Tallahassee Democrat(9),
U.S. Chamber's Institute for Legal Reform sponsored a television ad in
Florida last year that mischaracterized the results of their "study"
of state legal systems. U.S. Chamber's ad included the line, "[a]
recent Harris poll ranked the best to worst legal systems in America."
However, the Democrat reported that this claim was "wrong," noting
that the "ad did not mention the Harris poll was conducted among
corporate lawyers who have to defend their clients against civil
suits."
Lawsuits are Not A Major Concern for Businesses
-- A Survey Published by the National Association of Manufacturers Found
that American Manufacturing Companies Ranked the "Fear of Litigation"
at the Bottom of Their Concerns. The National Association of
Manufacturers released(10) a survey of manufacturers in the United
States showing that the "fear of litigation" ranked at the bottom of
their list of concerns:
"Please rate the following factors in terms of their negative impact on your company's operations (with 1 representing the greatest negative impact and 10 the least)."(11)
2.9 Cost of non-wage compensation
3.5 Cost of materials used in production
4.0 Inability to raise prices
4.1 Energy prices
5.0 Foreign competition
6.1 Taxes
6.3 Cost of wages
6.4 Shortage of qualified workers
7.4 Regulations/corporate governance rules (Sarbanes-Oxley)
7.8 Fear of litigation
-- Survey by Business Week Magazine Found that the Threat of Lawsuits is
Not a Major Concern of Small Business Owners. According to a survey
published(12) in Business Week magazine, owners of small and
medium-sized businesses are generally not concerned about the threat
of lawsuits: "One of the survey's more surprising results revealed
that tort reform -- particularly limiting class-action lawsuits -- is
not a major priority." The survey found that the biggest threats to
their businesses are: (1) Rising inflation, 44 percent; (2) The trade
deficit and a weak dollar, 40 percent; (3) Energy shortages, 40
percent; (4) Excessive household and/or corporate debt, 29 percent;
(5) The growing federal deficit, 28 percent; (6) Poorly prepared labor
force/Shortage of skilled labor, 27 percent.
The Number of State and Federal Tort Trials is Declining
-- Bush Administration Statistics Show that the Number of Federal Tort
Trials is Down Nearly 80 Percent Since 1985. The Bush Justice
Department reported that the number of tort (personal injury) cases
resolved in U.S. District Courts fell by 79 percent between 1985 and
2003. In 1985, 3,600 tort trials were decided by a judge or jury in
U.S. District Courts. By 2003, that number had dropped to less than
800.(13)
-- The Number of State Tort Trials is Decreasing. According to the
National Center for State Courts, the number of tort cases filed in
state courts has dropped dramatically in the past decade. Tort filings
in state courts dropped by 21 percent between 1996 and 2005.(14) A
study from West Virginia University's Institute for Public Affairs
discovered similar results for its state, which U.S. Chamber
continuously puts at the bottom of its rankings.(15)
-- "Overwhelming Majority" of Federal Judges Don't See "Frivolous
Lawsuits" as Major Problem. According to a survey by the Federal
Judicial Center -- the research and education agency of the federal
court system -- most Federal judges do not view "frivolous lawsuits"
as a problem: "Frivolous litigation is not a major problem in the
federal court system, according to an overwhelming majority of federal
judges who participated in a recent survey. The survey, conducted by
the Federal Judicial Center, was based on the responses of 278 federal
district court judges. Seventy percent of the respondents called
groundless litigation either a 'small problem' or a have ry small
problem,' and 15% said it was no problem at all. Only 1% called it a
have ry large problem,' 2% called it a 'large problem' and the rest
rated it as a 'moderate problem' in their courts. ... In addition, 91%
of the judges surveyed opposed provisions in the Lawsuit Abuse
Reduction Act, which won House approval in the last Congress."(16)
As the world's largest trial bar, AAJ promotes justice and fairness for injured persons, defends the constitutional right to trial by jury, and strengthens the civil justice system through education and disclosure of information critical to public health and safety. Serving members worldwide, AAJ provides attorneys with the information and professional assistance they need to serve clients successfully and protect the democratic values of the civil justice system. Visit http://www.justice.org/.
(1) Bureau of Economic Analysis, State BEARFACTS 1996 - 2006
(2) Louisiana Economic Development Department
(3) Bureau of Labor Statistics
(4) Stephanie Grace, "Bad Policy: Allstate Cancellations Draw the Scrutiny of Insurance Commissioner Jim Donelon," Times-Picayune, March 11, 2007.
(5) "Survey says frivolous lawsuits hurt state's reputation," Copley News Service, 3/8/04
(6) "AdWatch," The Tallahassee Democrat, 3/12/05
(7)"2005 U.S. Chamber of Commerce State Liability Systems Ranking Study," U.S. Chamber of Commerce, 3/8/05, http://www.instituteforlegalreform.com/harris/pdf/HarrisPoll2005-FullReport.pd f
(8) "Corporate lawyers rank state's legal climate poor," The Charleston Gazette, 3/9/05
(9) "AdWatch," The Tallahassee Democrat, 3/12/05
(10) "NAM Survey Shows Most Manufacturers Concerned About Energy, Production Costs and a Skills Shortage," National Association of Manufacturers press release, 3/21/05, http://www.nam.org/s_nam/doc1.asp?CID=67&;DID=236615
(11) "National Manufacturing Week 2006 Annual Survey Results," National Association of Manufacturers, http://www.nam.org/s_nam/doc1.asp?CID=6&;DID=236617
(12) "The Big Concerns of Small Business; A new survey points to the future of Social Security as a major concern. Tort reform, on the other hand, elicits only yawns," Business Week, 5/12/05, http://www.businessweek.com/smallbiz/content/may2005/sb20050512_8954_sb006.htm
(13) "Federal Tort Trials and Verdicts, 2002-03", Bureau of Justice Statistics, 8/17/05
(14) National Center for State Courts, "Examining the Work of the Courts, 2006."
(15) "The Future of the West Virginia Judiciary: Problems and Policy Options," The West Virginia Public Affairs Reporter, Vol. 24 Issue 2
(16) "Federal judges don't see problem with frivolous suits," Business Insurance, 4/11/05, http://www.businessinsurance.com/cgi-bin/news.pl?newsId=5365&;print=Y
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