States’ Lawsuit Climates Influence Expansion Decisions, Say Businesses

September 18, 2017

An all-time high 85 percent of senior business executives at major U.S. companies say a state’s lawsuit environment is likely to impact decisions about where to locate or expand their business, according to the U.S. Chamber Institute for Legal Reform’s (ILR) new 2017 Lawsuit Climate Survey: Ranking the States.

For the first time in the survey’s 15-year history, the survey crowned a new top state, South Dakota, as having the best legal climate for business. Delaware, which had the best lawsuit climate in every previous survey, lost its top position.

The survey shows state lawsuit climates overall are improving, and the competition among states is tightening. The difference between states’ individual scores is the smallest it has ever been, meaning that states are competing harder than ever to improve their litigation environments.

“If this were a marathon, the pack of runners would be tightening, and running faster. States not keeping up on legal reform are being passed by,” said ILR President Lisa A. Rickard. But, she cautioned that overall improvement doesn’t mean states have achieved a healthy lawsuit climate. “There’s been progress, but let’s not kid ourselves — the ‘sue ’em’ culture in the U.S. is still the world’s worst.”

In another first for the survey, Louisiana ranked at the bottom nationally. Other perennial bottom-10 states include California (47th) and Illinois (48th).

For the third time since 2010, Chicago/Cook County, Illinois, is ranked as the worst local jurisdiction. 24 percent of those surveyed said it has the least fair courts in the country. Other jurisdictions singled out as among the worst include: Los Angeles, Calif.; Jefferson County, Texas; New Orleans/Orleans Parish, La.; and Detroit, Mich.

Harris Poll, a global polling firm, conducted the 2017 Lawsuit Climate Survey through more than 1,300 telephone and online interviews between March 31 and June 26, 2017. Participants were senior business lawyers and executives in companies with annual revenues of at least $100 million. The ranked the fairness of state lawsuit environments across 10 categories including their laws, courts, judges and juries.

Scores presented in this table have been rounded to one decimal place, but rankings are based on the unrounded number. Source: U.S. Chamber of Commerce, Institute for Legal Reform