Abstract

http://ssrn.com/abstract=1470872
 
 

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U.S. Chamber of Commerce Liability Survey: Inaccurate, Unfair, and Bad for Business


Theodore Eisenberg


Cornell University - Law School

September 9, 2009

Cornell Legal Studies Research Paper No. 09-029

Abstract:     
The U.S. Chamber of Commerce uses its Survey of State Liability to criticize judiciaries and seek legal change but no detailed evaluation of the survey’s quality exists. This article presents evidence that the survey is substantively inaccurate and methodologically flawed. It incorrectly characterizes state law; respondents provide less than 10% correct answers for objectively verifiable responses. It is internally inconsistent; a state threatened with judicial hellhole status ranked first in the survey while venues not on the list ranked lower. The absence of correlation between survey rankings and observable activity suggests that other factors drive the rankings. Two factors may help explain them. First, persistent low ranking of Gulf Coast states indicates that corporate counsel cannot shed hostility to states that were prominent in asbestos and tobacco litigation, notwithstanding changes in state laws. Second, low rankings of populous states suggest respondents fail to distinguish between rates of events and the absolute number of events. Adverse events in large states may occur more often but not necessarily at higher rates than in small states. The Chamber’s uses of the survey fail to account for the sample design, fail to account for the same respondent rating multiple states, fail to account for industry effects, and fail to distinguish among respondents based on their knowledge of a state. The survey may discourage investment in the U.S. and corporate risk managers’ views suggest that the survey promotes corporate behavior that needlessly endangers the public.

Number of Pages in PDF File: 38

Keywords: tort reform, courts, punitive damages, class actions, juries

JEL Classification: K00, K13, K20, K40, K41

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Date posted: September 10, 2009  

Suggested Citation

Eisenberg, Theodore, U.S. Chamber of Commerce Liability Survey: Inaccurate, Unfair, and Bad for Business (September 9, 2009). Cornell Legal Studies Research Paper No. 09-029. Available at SSRN: http://ssrn.com/abstract=1470872 or http://dx.doi.org/10.2139/ssrn.1470872

Contact Information

Theodore Eisenberg (Contact Author)
Cornell University - Law School ( email )
524 College Ave
Myron Taylor Hall
Ithaca, NY 14853
United States
607-255-6477 (Phone)
607-255-7193 (Fax)
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