We Mean Business. Illinois Business.
 
 

Madison County's class-action label may drive businesses away
By KERRY L. SMITH

   Poll business executives as to what kind of reputation Madison County, Ill. has when it comes to class-action litigation, and you can pretty much predict the negative response you will get.

   Sadly, Madison County has earned it. But the real issue is this: what kind of reform is doable, and how quickly can it be done before more companies cross this region off the list of prospective areas in which to relocate or expand operations.

   Several conservative think tanks - the Center for Legal Policy at the Manhattan Institute in Indianapolis included - have found for four years running, Madison County has filed more class action lawsuits per capita than any other county in the United States.

   "Clearly, something is drawing plaintiffs' counsel to this court," said John Beisner with the Manhattan Institute, a class-action defense attorney and author of a recent report on the topic.

   The report says that Madison County is a perfect example of why such cases should be tried in federal court. "Madison County's courts are continually asked to set national policy on issues that could affect the daily lives of millions of Americans throughout the country," said Beisner, "from what water they drink to how much they pay for their next insurance policy or telephone bill, all from a small courthouse in Southwestern Illinois."

   Judy Pendell, director of the Center For Legal Policy, said it makes more sense for cases that affect consumers nationwide to be handled in federal courts.

   "The judges in federal courts are skilled at applying the laws of many states," she said.

   The report also noted that only a few of the defendants in Madison County's class actions are Illinois companies.

   Ed Murnane, president of the Illinois Civil Justice League, spends much of his time with policymakers and litigators, urging them to realize the negative economic impact excessive class-action litigation has on Illinois' business community, not just in Madison County but statewide.

   "When you have an environment that is pro-plaintiff, it discourages the business community from investing in our state and from locating here or expanding here," Murnane said. "And it definitely has an adverse impact on taxpayers."

   Competition is fierce for Illinois and its competitor states when a prospective employer is considering relocating to the Midwest, he said.

   "Out-of-state businesses that might be thinking of moving to Illinois may perceive Illinois as having a hostile legal environment, in light of all the class-action lawsuits here," Murnane said. "Illinois has a serious budget crisis right now. For a state to solve its budget crisis, it requires revenues, a significant percentage of which come from business and industry. All of these revenues are affected very severely by a bad or hostile legal environment."

   Jim Pennekamp, executive director of Leadership Council Southwestern Illinois, is as concerned as anyone when it comes to the excessive, often frivolous class-action lawsuits that have collectively tarnished Southwestern Illiniois' image.

   "When businesses evaluate location alternatives, one of the factors they look at is operational costs and potential future costs," Pennekamp said. "And one of the things we've been confronted with is the potential liability a business faces by choosing Madison County as a spot to relocate or expand. Fortunately, we are able to talk with these prospective employers about many plusses the region offers, but the class-action reputation can be a big negative factor that could sway their decision to come here."