Chamber Of Commerce Called Out For "Methodologically Flawed" Survey That "Provides Little Useful Information" and "Needlessly Endangers The Public"

With some three million members, the U.S. Chamber of Commerce still has considerable clout, especially in Congress where it recently lobbied the Senate to loosen restrictions on tax dodgers.  Despite its power and influence, deep fissures have emerged between the Chambers and some in the business community.  The California utility company PG&E, Nike and Apple are just a few of the companies that have recently left the Chamber because of organization's opposition to climate change legislation and its obfuscation of the science to support it. 

Not only is the Chamber unable to understand and accept the established science on climate change, but according to Professor Theodore Eisenberg, the Chamber lacks a rudimentary understanding of empirical analysis. 

Eisenberg, a law professor at Cornell and a foremost expert on the use of empirical analysis, recently called out the Chamber of Commerce for its misrepresentation of empirical analysis.  In a paper entitled U.S. Chamber of Commerce Liability Survey: Inaccurate, Unfair, and Bad for Business, published in the Journal of Empirical Legal Studies, Eisenberg criticized the method with which the Chamber compiles its state liability ranking, which according to the Chamber is a "national sample of in-house general counsel or other senior corporate litigators to explore how reasonable and balanced the tort liability system is perceived to be by U.S. business." Eisenberg calls the methodology used in compiling the ranking:

[S]ubstantively 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.

The survey is important and politicians and the business community often cite it as a means of attracting business to their states and influencing legislatures to push ahead tort reform.  According to Eisenberg, however, the method and the subsequent results are not based on reality and often times, ignore reality.

The survey lacks elementary social scientific objectivity and incorrectly characterizes state law. Objectively verifiable responses are correct less than 10% of the time. Respondents ignore legal rules and material events within states. States that allow punitive damages can be ranked higher with respect to punitive damages than a state that does not allow them at all. A state can be on a "judicial hellhole" watchlist but rank first in the Chamber's system while other venues not on the list rank lower.

Eisenberg goes on to argue that not only does the Chamber's data give false data to American companies, it in "discourages foreign investment."

Since companies cannot control the states in which they may be sued and foreign companies are more likely to lack the "on-the-ground" accurate information that domestic companies have, they may unnecessarily fear doing business, or increasing investment, in the entire country.

To drill the point home, Eisenberg concludes:

The survey methodology may generate a kind of lemon effect. Poorly informed, inflexible lawyers may be associated with companies' decisions to press to trial and trial losses. These weak lawyers are the ones most likely to be upset and to respond to the survey. They provide a biased picture of liability systems that is out of touch with reality.

For his efforts, Eisenberg has been slammed by Lisa Rickard, president of the Chamber's Institute for Legal Reform.  Rickard has called the paper "pro-trial lawyer advocacy."  Harris Interactive, which conducts the survey for the Chamber has responded to Eisenberg's paper by essentially agreeing with his conclusion that their survey is not meant to be objective or reflective of a state's tort system:

Most of his criticisms, directly or indirectly, are that we do not present an objective guide to how well the states' systems works - something we do not claim to do. He presents no evidence that our surveys do not represent the views of corporate counsel accurately, which is all we claim to do. In our reports we have always made it clear that we are measuring what corporate counsel believe, and that what they believe can have important consequences.