Legal News

Empirical Holy War: Cornell Law Prof Takes On Chamber Of Commerce

By Nathan Koppel

Theodore Eisenberg, a Cornell law school prof who specializes in statistical analysis, has taken aim at the U.S. Chamber of Commerce.

In this report, soon to be published in Cornell's Journal of Empirical Legal Studies, Eisenberg claims that the Chamber ranks states according to the favorability of their “lawsuit climate” improperly. Eisenberg’s report, as indicated below, has already touched off a quantitative smack down.

First, some background. The Chamber's Institute for Legal Reform publishes an annual survey, conducted by the Harris Poll, which ranks states from best to worst, according to how their judges treat class actions, the prevalence of punitive damages, and juries' "predictability and fairness" among other factors.

Here are the Chamber's 2008 rankings, in which Delaware earned top honors as the most favorable lawsuit climate, while Mississippi, Louisiana, and West Virginia, in that order, ranked as the three worst.

The rankings are somewhat influential, as evidenced by this opinion piece Tuesday in WSJ, written by Matt Blunt, the former Republican Governor of Missouri. He discusses his state's success "curbing junk lawsuits," noting that the Chamber's 2005 lawsuit-climate survey ranked Missouri among the 10 worst states. But after capping damages, among other measures, he writes, Missouri moved up to 31st in the Chamber's ranking, making them now middle of the pack.

Eisenberg concludes that the survey itself is logically inconsistent. Respondents, for example, he writes, make incorrect conclusion about which states are the most favorable towards punitive damages due to erroneous impressions among the respondents or even misrepresentations of a state’s laws by the Chamber. He says that a state’s movement in the ranking — such as New Jersey’s, which plummeted in one year — could not be validated by a detailed analysis of legal events in the state. Another problem: respondents are given the prior year's rankings before offering their opinions. This reduces the likelihood that a state could shake an unfavorable image, even if state law there had changed.

In general, the data used to knock places as judicial hellholes, he tells the Law Blog in an interview, "have been woefully inadequate to support the claim." State courts, he says, are the main culprit, because they don't provide useful information about case outcomes. "If I told you million dollar awards were an everyday event [in a particular state], how do you refute that?" he says. "There isn't one place you could go to immediately refute that."

Lisa Rickard, the President of the Institute for Legal Reform, says Eisenberg has been a paid plaintiffs' consultant, and she calls his critique "another example of his pro-trial lawyer advocacy."

"It isn't the first and it won't be the last time the Lawsuit Climate survey, conducted by the respected, non-partisan global market research firm Harris Interactive, has been attacked by the plaintiffs' bar and its ideological allies," she says.

Humphrey Taylor, chairman of the Harris Poll, also fires back at Eisenberg. "He presents no evidence that our surveys do not represent the views of corporate counsel accurately, which is all we claim to do," Taylor writes in a response to the Eisenberg study, a synopsis of which is here.

“I've worked for plaintiffs' lawyers, but I've also worked for defendants,” Eisenberg responds. “I was paid nothing to conduct this study, and no plaintiffs' lawyer had any input into it.”

Full post as published by Law Blog - WSJ.com on September 24, 2009 (boomark / email).