FOR IMMEDIATE RELEASE

March 27, 2006

SEAN HIGGINS, INVESTOR'S BUSINESS DAILY

BY SEAN HIGGINS
INVESTOR'S BUSINESS DAILY

If, for some reason, your company has to go to court, you'd rather it happen in Wilmington, Delaware. Or just about anywhere but West Virginia.

That's the result of the latest annual survey by the U.S. Chamber of Commerce ranking states on legal fairness towards business. It ranked all 50 states based on a survey of corporate attorneys.

The chamber found Delaware, Nebraska, Virginia, Iowa and Connecticut to be the five states with the best legal environment for business.

Hawaii, Alabama, Mississippi, Louisiana and West Virginia were the most hostile.

Texas and California weren't that friendly either, finishing 43rd and 44th, respectively. New York ranked 21st and Florida 38th.

Overall the so-called fly-over states represented the friendliest region.

Chamber President Tom Donohue said the survey should stand as a warning to some states that their tort systems could be scaring off business and hurting their economies. It also shows that legal reforms can change that.

"The chamber takes a lot of heat for being tough on states but when a state does the right thing we are the first to notice it," Donohue said at a press conference in St. Louis to announce the findings.

The event was held in Missouri to congratulate that state's rapid rise from ranking 40th out of 50 in 2005 to 35th this year, the fastest improvement ever in the rankings.

Donohue credited a recent legal reform package the state enacted that prevents venue shopping.

"The playing field in this state has been leveled," he said. "The five-point jump showed that businesses across the state know it."

Missouri Lt. Governor Peter Kinder, who joined Donohue at the event, called it "wonderful news" and promised the state would continue to "fine-tune" itself.

"The best jobs never come from a government program. Good jobs, by way of contrast, come from a healthy thriving economy in the private sector," Kinder said.

The survey ranked states based on their treatment of tort and contract litigation, venue requirements, class-action laws, punitive damage and non-economic damage requirements, the speediness of cases, rules on discovery and evidence, jury fairness, and the fairness and competence of judges.

Chamber officials said this year's ratings showed a slight improvement overall, reflecting recent reforms passed in states such as Missouri, Georgia, Florida, Ohio and Illinois.

The survey was not based on hard statistics such as the size of jury awards or the frequency of class-action suits. Rather it was a poll based the corporate attorneys' opinions regarding the states.

Harris Interactive conducted it for the chamber's Institute for Legal Reform. It involved 1,456 senior corporate attorneys who worked for companies with at least $100 million in annual revenue.

Donohue said the survey respondents were chosen because it was their companies that were facing the most litigation.

"It's like what Willie Sutton said about robbing banks: 'That's where the money is,' " he said.

Lisa Rickard, ILR president, said the point of the survey was to gauge how leading corporate lawyers view their states' legal climates.

"Their perception of the legal climate in a state drives a lot of decision-making in boardrooms," Rickard said.

Some states cried foul.

Richard House, executive counsel for Louisiana's department of economic development, called it "an extremely flawed analysis."

"Some of this is lingering publicity from old cases in the state" and doesn't represent the state's business climate today, he said. The state's lack of punitive damages should have earned it a higher ranking, he added.

Lara Ramsburg, spokeswoman for West Virginia Gov. Joe Manchin, whose state was ranked dead last, declined to comment.

"We haven't had a chance to see it," she said, adding, "We do believe we have made significant strides in improving our business climate."