SACRAMENTO – Rhode Island has dropped nine spots to No. 35, according to a report released at 1 p.m. today by the U.S. Chamber of Commerce’s Institute for Legal Reform.
The Ocean State’s legal climate received 58.5 points out of a possible 100 in “Lawsuit Climate 2007: Rating the States.” This is the sixth year for the report, which was prepared for the ILR by polling firm Harris Interactive, based on a survey of 1,599 senior lawyers nationwide.
The state ranked 28th for timeliness of summary judgments and dismissals, 35th for treatment of class-action suits, 36th for overall treatment of tort and contract litigation, and 39th for both its handling of the discovery process and “having and enforcing meaningful venue requirements.”
“Rhode Island’s legal system is headed in the wrong direction,” Tom Donohue, president and CEO of the U.S. Chamber, said in a statement. “The attorney general has teamed up with the plaintiffs’ bar to rewrite the ground rules for public nuisance lawsuits, essentially denying businesses the opportunity to mount a fair defense.
“In allowing him to do so, the state’s courts have made it possible to sue product manufacturers for just about any societal problem, which will doubtless cause businesses to think twice about coming to the state.”
A recent actuarial study estimated the annual cost of the tort system in America to be $261 billion, or $880 per citizen. Following those estimates, the price tag of tort litigation for the entire population of Rhode Island is nearly a billion dollars a year.
“We didn’t ask specifically” about Rhode Island’s lead-paint lawsuit in the survey, IRL spokesman Larry Akey told Providence Business News in a telephone interview. “But certainly, I think the fact that the lawsuit was so highly visible nationally and really did break new ground … the business community couldn’t help but notice.”
“It’s a disappointment,” he said of the verdict holding paint-makers responsible for the cost of cleaning up lead-paint contamination in the state.
Besides “the amount of money at risk” in the case, which has been appealed to the R.I. Supreme Court, Akey cited the use of “novel legal theories that take away most of the defenses companies would have had, had the case been brought under more traditional product-liability law.” The case “can’t help but impact the decisions of America’s largest employers,”he said.
Still, he conceded, recent lawsuits by other states and municipalities, including Ohio’s suit against paint-makers, could help boost Rhode Island’s future rankings. “Because the rankings are relative to one another, often some states move up and others move down in response to changes in the climate.”
Concluded the U.S. Chamber’s Donohue, “The best thing Rhode Island can do to attract business is to have a fair legal system.”
Also in the survey, West Virginia ranked last among the 50 states, for the sixth year of the row, while Delaware took this year’s top honors.
Massachusetts, with 65.7 points, soared to 18th overall from its 2006 rank of 32nd.
“The biggest changes were in the perception of judges’ fairness and impartiality,” where the state was ranked fourth nationwide, Akey said. Another factor that helped, he said, is that Massachusetts “generally does not allow for punitive damages.”
The Bay state was ranked No. 5 for its handling of scientific and technical evidence, 39th for timeliness of summary judgments and dismissals, 22nd for its handling of the discovery process, 18th for treatment of class-action suits, 16th for overall treatment of tort and contract litigation and 15th for “having and enforcing meaningful venue requirements.”
Though a marked change from last year’s 26th-place finish, Rhode Island’s score is much like those in years past. The state ranked 35th in both 2005 and 2002, 36th in 2004 and 37th in 2003.
Massachusetts, by comparison, had ranked 31st in 2005, 28th in 2004, 22nd in 2003 and 36th in 2002.
The IRL is launching a national campaign, including radio ads in the Providence market, to highlight the study’s results.
Additional information is available at www.instituteforlegalreform.com.
