CHARLESTON – West Virginia's legal climate has fallen to last place among the 50 states in a new national study.
The 2006 State Liability Systems Ranking Study, released Monday by the U.S. Chamber Institute for Legal Reform, also says West Virginia courts are among the least fair and reasonable jurisdictions in the country.
"What's happened is that West Virginia was surpassed by another state (Mississippi) that has done more to improve its legal climate," said Lisa Rickard, president of the Institute for Legal Reform.
The study, now in its fifth year, was conducted between November 2005 and March 2006 for the Institute for Legal Reform. In the previous four years, West Virginia had ranked 49th, just ahead of Mississippi each year.
The study was conducted by Harris Interactive for ILR. The survey polled more than 1,400 senior attorneys to explore how reasonable and fair the tort liability system is perceived to be by U.S. businesses. The attorneys were asked to judge a number of factors, including overall treatment of tort and contract litigation, treatment of class action suits and mass consolidation suits, judges' impartiality and competence, and juries' predictability and fairness.
The results of the IRL study were dismissed by the West Virginia Trial Lawyers Association, which called it "a sham study designed to dupe West Virginia lawmakers into destroying important consumer protection laws."
Other groups, including the state Chamber of Commerce, praise the findings.
West Virginia ranked last in nine of the 12 study categories. Those categories include Having and Enforcing Meaningful Venue Requirements; Treatment of Tort and Contract Litigation; Treatment of Class Action Suits and Mass Consolidation Suits; Punitive Damages; Timeliness of Summary Judgment or Dismissal; Discovery; Scientific and Technical Evidence; Non-economic Damages; and Judge's Competence. The state ranked 49th in Judges' Impartiality, 45th in Juries' Predictability and 48th in Juries' Fairness.
"Why has West Virginia fallen to dead last in the legal fairness rankings?" asked Tom Donohue, president and CEO of the U.S. Chamber of Commerce. "Simple: the state Legislature has failed time and again to pass meaningful and comprehensive legal reform legislation and the court system continues to be anti-business and anti-job creation."
Donohue said the best thing West Virginia can do to attract business is to have a fair legal system.
"Businesses aren't looking for an unfair advantage; they just want a level playing field," h said. "An unfair legal system sucks the life out of a state's economy. It affects business expansion, it affects jobs and it takes money out of consumers' pockets."
Still, Donohue said he is confident West Virginia can turn it around.
"Gov. (Joe) Manchin has committed to making changes, and we are looking forward to working with him to make West Virginia truly open for business."
During the 2005 legislative session, the first under Manchin, Rickard said some progress was made.
"We had a good start last year, and Gov. Manchin helped advance third-party liability reform," she said. "We saw some incremental reform, but it's not anywhere close to where it needs to be. We need the legislative action to move to enact more statewide reform to improve litigation."
Rickard said the most pressing changes she'd like to see in West Virginia are improvement to the joint and several liability law, "meaningful" limitations on non-economic damages, collateral source rules and asbestos and silica lawsuit reform.
Officials in Manchin's office said they hadn't review the full report, but said they are ready to listen.
"We're open to listening to anyone's concern about our state's business climate," Manchin spokeswoman Lara Ramsburg said. "In the last year, the governor has been clear that we want to be a partner with our businesses."
Ramsburg said state officials plan to hit the road soon for town meetings across the state to discuss this and other topics facing businesses.
"Again, it's something we're open to hearing from all constituencies about," she said. "Tax reform, for example, needs to be addressed. And that is the next thing on our horizon. There are a lot of things that make up our business climate. Hearing from local businesses to hear what they think we need to focus on.
"Everything is on the table, but we have to determine where they see us heading next."
The watchdog group West Virginia Citizens Against Lawsuit Abuse praised the ILR report and the group's efforts.
"Employers create jobs where the legal system is fair," said Steve Cohen, WV CALA's executive director. "In the recent legislative session, the rules committee failed to move the Sunshine Bill to hold the Attorney General (Darrell McGraw) accountable for choosing campaign-contributing pals from the personal injury bar as outside counsel in a recent lawsuit. This is precisely the kind of thing that drives jobs out of our state."
Harvey Peyton, president of the West Virginia Trial Lawyers Association, said the study's polling method is unfair.
"The Harris poll surveys only corporate attorneys" he said. "Attorneys cannot participate unless they are employed as in-house counsel by corporations that earn at least $100 million in annual profits.
"How many of those attorneys have any first-hand knowledge about West Virginia's judicial system? How many of them have ever stood before a West Virginia judge? This isn't a valid analysis of our courts. These are in-house attorneys who are responding exactly the way the Chamber tells them -- and the results are exactly what the Chamber expected them to be. It's like polling fans at Mountaineer Field on whether or not they like WVU."
"Mark Twain could have been talking about Donohue's bogus poll when he wrote, 'Some people use statistics like a drunk uses a lamppost -- more for support than illumination.' This so-called 'study' is nothing more than a trumped-up public relations gimmick to advance the Chamber's political agenda of destroying consumer protection laws and providing total immunity to billion-dollar corporations that break the law."
Rickard dismissed such criticism.
"What they need to look at who brings jobs into the state, and do the trial lawyers care at all about job creation in the state?" she asked. "If so, then they need to look at this poll. This are people who make decisions about where to bring jobs. That is an issue that is important to West Virginians.
"West Virginia is not home to one Fortune 400 company. You should care. You should want to know what the opinion leaders think about the litigation climate in this state."
Steve Roberts, president of the state Chamber, agrees.
"I think it is a useful tool that helps evaluate a state's legal climate," he said of the survey. "And I hear from too many people who are running businesses in West Virginia that the legal climate in our state is a problem to not take it seriously.
"Eighty percent or more of the jobs created in any state are created by the businesses that are already there. So we need to pay serious attention to what our employers are saying. They are very consistent in saying that our legal and judicial system is out of step and needs to be moved in a direction of fairness."
Roberts said the state's ranking wasn't a shock to him.
"I'm sorry that we're 50th, but I'm not surprised," he said. "We're going to continue letting legislators know how important the legal climate is when we try to keep jobs in West Virginia or attract new ones."
Peyton also criticized Donohue's use of figures from a recent actuarial study that estimated the annual cost of the tort system in America to be $260 billion, or $886 per citizen. Following those estimates, the price tag of tort litigation for the entire population of West Virginia is more than $1.6 billon.
"What is even more outrageous is that Donohue doesn't use just his own sham study to mislead West Virginians, but he cites the Tillinghast-Towers Perrin 'tort costs' study which has been discredited in its own right," he said. "That study has been denounced by national consumer groups including the Center for Justice and Democracy and Americans for Insurance Reform. …
"After being criticized for the methodology, Tillinghast-Towers Perrin was forced to admit in their 2005 edition that "the costs tabulated in this study are not a reflection of litigated claims or of the legal system. …
"Yet, here's Tom Donohue still trying to force it down our throats like pabulum. That alone should show anyone how worthless and ludicrous this so-called study is.
"It's far past time for Tom Donohue and the U. S. Chamber to stop lying to the people of West Virginia. The truth is that the U. S. Chamber doesn't care about West Virginia consumers, West Virginia workers or West Virginia jobs. The only thing that matters to Tom Donohue is protecting corporate profits at any cost."
In the rankings, West Virginia joined Louisiana, Illinois, California and Texas in the bottom five states for legal fairness. The five top states for overall legal fairness were Delaware, Nebraska, Virginia, Iowa, and Connecticut.
"This survey sends a clear message to states whose legal climate drives away businesses, jobs, and economic development," Donohue said. "If you want a healthy state economy, clean up your act.
"Businesses go where they are welcome. One of the most welcoming features of a state is a fair legal system. When businesses set up shop in your state, they bring jobs, an expanded tax base, and economic vitality."
To highlight the results of the study and the need for comprehensive legal reform, ILR is also launching a national advertising campaign. In West Virginia, ILR will run print, radio and billboard ads featuring the message "Please Don't Feed the Trial Lawyers."
The Chamber is part owner of The West Virginia Record.