CHARLESTON — For the fifth consecutive year, West Virginia’s lawsuit climate has been ranked worst in the nation.
“As our economic downturn has continued, a growing percentage of business leaders have identified a state’s lawsuit climate as a significant factor in determining their growth and expansion plans, and the jobs that come along with them,” said Lisa A. Rickard, president of the ILR, which owns The West Virginia Record. “That makes the consequences of this survey even more significant to the economic growth of West Virginia.”
A study released Monday — titled Creating Conditions for Economic Growth: The Role of the Legal Environment and completed by NERA Economic Consulting for ILR in 2011 — says West Virginia could save up to $320 million in tort costs if it were to improve its legal environment.
U.S. Chamber President Tom Donohue reiterated that point.
“I’ve talked to people in West Virginia who were encouraged to come there to set up business there who would never do it again and who won’t invest more money,” Donohue said. “The state has to understand they make a change or they’ll be last in economic development as well.”
The ILR also says the importance of a state’s legal climate on business expansion decisions has increased over the last five years. According to the survey, seven out of 10 respondents say a state’s lawsuit environment is likely to impact important business decisions at their company, such as where to locate or expand their businesses. That is a 13 percent increase from the survey results just five years ago.
“West Virginia continues to suffer from outrageous verdicts, lack of meaningful appellate review, an overzealous attorney general’s office, antiquated laws, and frivolous lawsuits,” Rickard said.
The West Virginia Asssociation for Justice condemned the survey, calling it dubious and saying it spreads misinformation about the state’s business climate.
“The so-called study is just more of the ongoing propaganda designed for one purpose — to scare West Virginia voters into giving up their constitutional right to trial by jury and provide total immunity for corporations who break the law,” WVAJ President Scott Blass said in a statement.
Blass said the study has been discredited for more than eight years.
“To continue to release this study as ‘news’ and attack the State of West Virginia, its business climate and its courts shows the Chamber’s callous disregard for both the truth and the people of this state,” Blass said. “Copley News Service reported that ‘Humphrey Taylor with 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.’”
Blass noted that the Harris study surveys only corporate attorneys who are employed as in-house counsel by corporations that earn at least $100 million in annual profits. In previous years’, he said that meant less than 10 percent of respondents had any first-hand knowledge of West Virginia courts.
“By questioning only its most powerful members, the Chamber is getting the results it wants and then issuing this ‘study’ as a legitimate analysis of our courts,” Blass said. “It’s like asking fans at Mountaineer Field whether or not they want WVU to win the football game. It’s ridiculous.
“Here’s the truth. Independent analyses show that, despite what ATRA claims, lawsuits are not an issue for business owners, West Virginia ranks just 39th in the number of lawsuits filed per capita and more than $13 billion in new business investments have been made since 2005.”
“Here’s another truth: our courts play a critical role in protecting the interests of West Virginia businesses. According to the National Center for State Courts, business against business contract cases comprise more than 50 percent of all civil cases filed nationally. Just 5 percent of civil cases are tort cases, but one-third of those are tort cases filed by one business against another.”
The executive director of West Virginia Citizens Against Lawsuit Abuse, on the other hand, said the results were no shock.
“It’s unfortunately no surprise that West Virginia’s legal climate continues to rank as the worst in the nation, as we’ve failed to enact any of the legal reform measures recommended to move our state legal system forward,” Richie Heath said. “The Institute for Legal Reform’s latest survey confirms what we’ve known for years — that the lawsuit climate is a significant factor for job providers when deciding where to locate their businesses.
“While other states are moving forward with legal reforms — with nearly half of the 50 states passing meaningful reforms last year alone — West Virginia continues to fall further behind. West Virginia’s appellate system, and in particular the state’s lack of an intermediate appeals court, remains out-of-step with the national legal mainstream and is continually cited a major roadblock to attracting jobs back to our state.”
Heath said business leaders were saying the same thing last month at the West Virginia Chamber of Commerce’s annual Business Summit.
“Just a few weeks ago, several notable state business leaders expressed similar concerns about our state legal climate, saying that West Virginia doesn’t compare favorably to neighboring states,” Heath said. “State lawmakers cannot continue to ignore this problem and hope that it goes away.
“Rather, our state would be better served by moving to enact the meaningful legal reforms that would finally return West Virginia to the mainstream.”
Harris Interactive conducted the survey Lawsuit Climate 2012: Ranking the States by telephone and online between March and June 2012. The respondents were general counsels and senior attorneys or leaders in companies with annual revenues of at least $100 million. They were asked to rank states for their overall treatment of tort, contract, and class action litigation. Among other elements, respondents also ranked states for the impartiality and competence of their judges and the fairness of their juries.
Just ahead of West Virginia on the list are Louisiana, Mississippi, California and Illinois. The study was released in Philadelphia because the ILR said Pennsylvania’s legal environment has worsened in recent years because of “lax venue rules, especially in the Philadelphia Court of Common Pleas, where 47 percent of the asbestos cases filed last year were by out-of state plaintiffs.”
Pennsylvania was ranked among the states with the least fair and reasonable legal environments and Philadelphia was ranked as the fifth worst city or county legal environment in the country following Los Angeles and Cook County, Ill.
“Pennsylvania stands geographically between the nation’s worst legal climate in West Virginia, and its best in Delaware,” Rickard said. “Unfortunately, the state is heading more in West Virginia’s direction by allowing plaintiffs’ lawyers to ‘forum shop’ for favorable venues like Philadelphia to cash in.”
In conjunction with the survey release, the ILR is launching a national television and online advertising campaign featuring Blitz USA, an Oklahoma-based company driven out of business in July as the result of unwarranted lawsuits against it. See the commercial at: www.instituteforlegalreform.com/media.
Harris Interactive conducted the survey Lawsuit Climate 2012: Ranking the States by telephone and online between March and June 2012. The respondents—general counsels and senior attorneys or leaders in companies with annual revenues of at least $100 million—were asked to rank states for their overall treatment of tort, contract, and class action litigation. Among other elements, respondents also ranked states for the impartiality and competence of their judges and the fairness of their juries.