Lawyers or Unions?

I've been thinking about John Edwards as a trial lawyer, and the fact that Republicans seem totally blind to the fact that not everyone hates plaintiffs' lawyers as routinely as they do. It is a real blindspot of the conservative elite, who don't know anyone who thinks differently.

It also reminded me of a conversation I had over the winter with an old friend who is a conservative corporate lawyer in South Carolina. (And also one of the most interesting, well-read, thoughtful and likable people I know.) He recounted a conversation with a client whose company was opening a plant in South Carolina. "I love doing business in South Carolina," the client said. "You got no unions." My friend said, "That's true, but we have plaintiffs' lawyers."

This is more than a point about South Carolina, though. Here are some relevant state rankings:

States with lowest union density (union members as % of all employed)

North Carolina
South Carolina
Arkansas
Mississippi
Utah
Arizona
South Dakota
Texas
Florida
Louisiana
Georgia
Oklahoma
Idaho
New Mexico
Alabama

The five "worst states" for litigation, in a survey of businesses commissioned by the U.S. Chamber of Commerce in 2003:

Alabama
Louisiana
Missisippi
Texas
West Virginia

States with counties dubbed "Judicial Hellholes" in a survey for the American Tort Reform Association

Texas (3 counties)
Mississippi (2 counties)
Louisiana
West Virginia
Florida
Missouri
Mississippi
South Carolina
West Virginia
New Mexico
Illinois
Pennsylvania

(States on both the low-unionization list and the tort reformers hit lists are in boldface.)

These lists are sort of apples and oranges -- union density is a fairly objective fact about a state, while the phrase "judicial hellhole" doesn't really have fixed meaning and I don't intend to endorse it. But the business surveys presumably do capture which states and counties are perceived to have generous juries and plaintiff-friendly judges and laws. The correlation isn't perfect, but it is close enough to say that it seems to be the rule that where there are no unions, there are plaintiffs' lawyers, and vice versa. (Except in Western states such as Utah, Idaho and Arizona that have both low unionization and also are not perceived to have strong plaintiffs' lawyers.) I'm sure there is some explanation for this, perhaps in the state constitutions, or in the history of Southern white politics and its love-hate relationship with corporate power. (I came across this article on the topic of tort law and state constitutions, which looks interesting but I'm probably not going to find time to read it unless it's going to be on the exam.)

If you were designing a society and had to choose between two means of checking corporate power -- strong unions and a generous but arbitrary and patchwork tort process -- you would undoubtedly choose unions. The tort system, especially in the "hellhole" states, delivers very generous rewards to a very few victims, which have no value except deterrence in making the broader societal outcomes fairer. And the victims who do win large awards are sometimes not the most seriously affected victims of even the specific negligence, and they rarely go to those most damaged in the broader sense. To take a caricatured example, if a doctor makes an error that causes some permanent damage, it will usually lead to a settlement or large award, but if you are uninsured and the harm is caused by the fact that you didn't see a doctor or get the right treatment, you're out of luck, just because there's no one to sue.

These problems make the idea of tort reform or civil justice reform appealing. But I also recognize that to limit access to the courts has a disparate impact in the South particularly, in states where people have few other ways to get justice. I know there are ways to reform the tort system that would actually benefit those truly hurt by corporate negligence, but the advocates of tort reform never seem particularly interested in that goal.

I know I'll get a comment or two on this, so bring it on. Also, if anyone knows of harder numbers to rank the states on plaintiff-friendliness, for lack of a better phrase, please let me know. I thought I'd seen some better state-by-state numbers, but those two business opinion surveys were all I could find by searching.

Comments

[johnl]

The phrase "plaintiff friendliness" needs to be unwrapped a bit to get at the relevant explanatory variables. For instance, if we're talking about medical malpractice, I would hypothesize that some of the difference can be explained by the tendency of poor states to have a disproportionate share of the nation's incompetent doctors. If we're talking about lawsuits over environmental damage or worker's compensation, we would expect to see states with a high concentration of extractive industries on the list, as indeed we do. That still leaves categories like product liability or consumer fraud, for which I have no good hypothesis.

[praktike]

One major problem with having a liabilty-based enforcement scheme is that our courts are grossly inefficient. Of course, there are certain interests that like it that way.

[nolo]

Nice theory, but I think you've got a case of false correlates. Or, at the very least, a case where the relationship between the two phenomena is much more complex than you think. The civil lawsuits that give rise to the verdicts that, in turn, give rise to labels like "jackpot jurisdiction" seldom address the issues that unions address (such as fair wages and working conditions) -- or if they do, they do so only indirectly. The civil lawsuits that give rise to griping about "jackpots" almost always involve consumer protection or personal injury claims, and do not address or affect conditions in the workplace. Worker injury claims almost never give rise to lawsuits against employers, since worker injury claims almost always fall within a state's workers' compensation laws and thus cannot be brought as lawsuits. Sometimes an injured worker will be able to bring a lawsuit against an equipment manufacturer or other third party, but it's hard to see how such claims would affect an employer or its practices.

I'm not discounting the effect unions can have, by the way, nor am I saying unions aren't a good thing. I'm just saying I don't see the connection.

[Anno-nymous]

Purely based on the evidence provided, I don't think your case is all that solid. You've shown that there are some overlaps, and that's all -- a correlation, and not a very strong one. Those states are also generally Southern, conservative, probably poor, probably have a high degree of racial diversity with a similarly high degree of de facto segregation, ...

[Peter Levine]

I've had a similar feeling that tort claims are safety valves in states with relatively little regulation and few unions. However, the problem with the surveys you cite is that business people may simply be less tolerant of lawsuits in the mostly Southern states that rate as "judicial hellholes." I went looking for more objective statistics, and what I found wasn't too supportive of our hypothesis. This Justice Department survey of large counties (see the pdf, p. 7) finds many fewer tort claims per capita in Texas and Georgia than in Connecticut, Michigan, and Pennsylvania. Since the survey is restricted to large counties, it leaves out rural America. Still, by this measure, Philly is the true judicial hellhole, with 1,178 tort claims per 100,000 people, compared to 208 in Honolulu (where people are too mellow to sue) and 221 in Atlanta. The frequency of claims isn't the only thing that matters. Maybe the states with the strongest tort systems--for good or ill--are the ones where the plaintiffs prevail most often. This study (pdf, p. 22) provides statistics on victories, again for large counties only. I can't see a regional pattern, although Atlanta is very high at 69%. Finally, according to this report (Appendix D), the median award is much higher in New York City than in any of the Texas counties in the sample.

[none]

Decembrist: A great post; I have long simmered over the right's blubbering about "frivilous lawsuits." Sure, there's there some of that out there, but I don't think, really, that's what all the bellyaching is about. The correlation you dug up--however loose--is significant, I think. It doesn't answer to all the issues about tort reform (which you rightly point out can cut both ways, politically speaking), but the fact of the matter is that the South was the cheap labor market of first choice, back some time ago, and not least because of the lack of union presence. At any rate, the point you make is that working people need representation, and ultimately, will demand it. If it's not a union--and as we know, that can be a challenging task, to say the least, in a poultry plant or some other such place--then it'll be a trial lawyer. Good point, all around.

[RWells]

forgot to sign off on the last comment.

[Rbot]

Off-topic hypothetical:

Are the poor subsidizing the rich when we all pay the same price for goods and services?

Say you make 3 times more money than I, and we both have 20 years left to earn. We both die when our airliner crashes, and finally, it comes out in court that the airline negligently gambled on skimpy maintenance.

Now, if we both paid the same price for our plane tickets, why should your rich family stand to gain more than my non-rich family from a lawsuit against the airline? Yes, you have suffered greater loss of future wages, but we paid the SAME price for our tickets. I mean, we're paying the same price, but you're getting Rolls Royce coverage while I'm only covered for a Chevy loss.

Plus, your family's larger damage claim will tend to attract the better lawyers on a contingent fee set-up, leaving the dregs for my family.

Seems like a subsidy flowing from poor to rich which allows the rich to hire better lawyers and to take bigger bites out of the insurnace apple.

[tib]

I suspect that union presence is a side effect of the inverse relationship between regulation and litigation. I am not a student of economics but from my limited understanding of R. H. Coase's 1960 paper "The Problem of Social Cost" disputes over the allocation of resources (or who bears the cost of damages) may be settled either by regulation or litigation. Disputes occur regardless of the local legal framework, so in the absence of regulation there will be more litigation.

I bet that a well-regulated state, one with enough regulation to reduce lawsuits but with few regulations that interfere with optimal economic outcomes, encourages dispute resolution through private (union) negotiation over litigation or regulation.

In Coase's analysis this is less a question of controlling corporate power than of allocating resources. Disputes over social costs are just as likely to arise between two powerful corporations as between a corporation and the public. A low regulation environment will see more inter-corporate lawsuits as well as consumer lawsuits.

Tort "Reform" is largely an attempt to force the public to bear most of the social costs individually. It is regulation that allocates the costs to individuals. Since most individuals cannot bear these costs the state inherits them, which leads to higher taxes. These taxes do not generally send a price signal to the corporation that incurred the cost, so there is no impetus for that corporation find better ways to allocate resources, leading to inefficient economic outcomes and the decline of productivity for the state as a whole.

[nolo]

tib nails it.

[Mary]

What about the Libertarian method of pollution control which assumes that the ability to sue your neighbor is better than regulations? Here is an article that describes that philosophy.

In Britain, individuals have property rights in the rivers that run through their land. If someone upstream pollutes the water and harms the fish, the downstream owners don't have to wait for a bureaucratic commission to study the issue. Instead, they immediately sue the polluters to protect their valuable property and claim restitution for damages. As a result, would-be polluters are effectively deterred from damaging the environment.

It seems like either there is a real cognitive dissonance in libertarian circles or those that proclaim to love the environment but don't like regulations are patently dishonest or they are being taken for a ride by their conservative friends. Whatever the case, they are not able to protect the environment - acid rain proves that point.

[alkali]

I would note that when a business moves its operations to state X, that may affect the ability of its employees in state X to unionize, but it won't affect whether the business is susceptible to suit in state X: if you ship product to state X, generally speaking, you may be sued there. So they aren't precisely parallel.

[Doug]

All of the states that Mark listed in his post are Right To Work states except for Pennsylvania and West Virginia which so happen to be key battleground states for Bush and Kerry. It is no secret that the GOP supports the Right To Work Foundation and that the South is courting all the auto makers and other manufacturers to build in their states. I don't have the numbers in front of me but I do believe that many of the Southern states have the least-educated workforce in the nation. So the GOP and the Southern business cabal feed on the poor and ignorant to keep their machine greased and runnin. Anybody can see why the GOP hates trial lawyers and labor unions because they are in the way of their right-wing 'progress'.

[God]

The hates trial lawyers and labor unions because trial lawyers are leech liberals that destroy the world, drive up medical expenses so that people suffer. Labor unions are collection agencies for liberal thugs gangsters. All take away Americans freedom at gunpoint. Grow little lib Dougie. And stop masturbating while peeking at your neighbors little boy. Liberals, how did they get on the Arc?

[Jon]

Is it possible that unionized labor produces goods of superior quality/reliability/safety? If so, it would theoretically reduce product liability lawsuits against corporations and thus the large awards to the plaintiffs. Obviously, this would only account for one small piece of the puzzle.

[german]

'rely based on the evidence provided, I don't think your case is all that solid. You've shown that there are some overlaps, and that's all -- a correlation, and not a very strong one. Those states are also generally Southern, conservative, probably poor, probably have a high degree of racial diversity with a similarly high degree of de facto segregation, ...'

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