The Institute for Legal Reform’s seventh annual ranking of the 50 state lawsuit systems is out. Each year, the immediate curiosity is always, “who’s on top? Who’s at the bottom?” For the record, Delaware is again number one, although by the slimmest of margins. For the third year running, West Virginia is number fifty, though showing some signs of improvement.
The more interesting questions are ones that get to the heart of why we continue to do this study each year: Why do certain states rank where they do? And how can a state create a good legal climate?
One thing I can say for sure after seven years is that a legal climate is never the result of a single event, law, ruling, judge, or verdict. All of these things are critical to creating a good – or bad – legal climate.
Since we began our state ranking in 2002, several states have enacted “tort reform” of various types and to varying degrees of success. The truth is, enacting legal reforms is only the first step. The legal climate is only as good as the willingness of the state’s judiciary to interpret the reforms and to follow them as enacted.
Texas passed comprehensive legal reform several years ago, but judges in parts of the state refuse to follow these reforms, continuing to cultivate very unfair jurisdictions.
Beyond the notion that the courts and the legislature both share in creating the legal climate, the civil justice systems of competing states are having an increasing effect on each other. For example, when Texas cleaned up its asbestos class action cases, the Texas plaintiffs’ lawyers began looking for other states in which to file their claims. So far they seem to be settling on California, where class judges are much more plaintiff-friendly.
Delaware is now discussing what to do about a rise in cases coming from, among other places, the jackpot jurisdiction of Madison County, Illinois.
And in yet another example, the decisions in a handful of trial courts in New Jersey have caused the ranking of that state to drop significantly despite the efforts of Governor Corzine to block trial lawyer legislation from advancing through the legislature.
Several years ago I used the term “whack-a-mole” to describe the resiliency of the plaintiffs’ bar in finding creative ways to advance their lawsuit-centered business model. The notion is simple and effective: when you’re beat in one state, move to another one and set up shop. When one judge blocks your efforts, find another judge. When one legal theory doesn’t work, find (or invent) another.
A state that has a good legal environment today is not guaranteed that same good environment tomorrow absent constant vigilance and a statewide commitment to maintaining a fair system. Conversely, a state that is low in the rankings can improve, but it takes a broad, sustained focus on the issues. It takes an understanding that even with incremental improvements a state’s legal system will still be compared to its neighbors. Indeed, in our increasingly global business environment, what happens in California can easily affect Florida or Virginia or Louisiana.
Our 2008 lawsuit climate rankings provide decisionmakers a detailed opportunity to understand how their state’s civil justice system stacks up against the others. But those who are interested in creating and sustaining a quality, fair legal climate will understand that legal reform is not a “check the box” activity. It is like a garden that must constantly be weeded, watered and pruned in order to remain fruitful and attractive.