The Montana Chamber of Commerce has released its 2018 Judicial Review, which reviews actions of the Montana Supreme Court over 2016 and 2017. Coupled with other judicial news, it adds to an improving picture regarding Montana’s judicial system – something that is pleasing the Montana Chamber of Commerce as it advances its program, Envision 2026.
The most recent review encompasses a two-year period of important court decisions related to business. As a whole the Montana Supreme Court averaged a score of 72% in making decisions supported by the Chamber as being conducive to the state’s business climate.
Individually — Justice Beth Baker scored 72% in decisions for the 2016-17 years (with 65% for a career judicial score); Justice Patricia Cotter, 50% (41%); Chief Justice Mike McGrath, 66% (55%); Justice Laurie McKinnon, 88% (89%); Justice Jim Rice, 73% (78%); Justice Dirk Sandefur, 71% (71%); Justice Jim Shea, 66% (63%); and Justice Mike Wheat, 61% (48%).
Montana’s rank among the states regarding its legal environment has improved markedly in five years. Each year, the US Chamber’s Institute for Legal Reform (ILR) issues a report on the status of the legal climate for all the states. In 2012, Montana was ranked 45th – “sixth from being the worst,” emphasizes Bridger Mahlum, Government Relations Director for the Chamber. By 2017, Montana rose seven places to being ranked 27th.
The Institute estimated that the improved legal climate in Montana holds the potential of reducing tort costs by $148 per $1 million of tort claims filed, and of increasing employment in the state by 0.72 percent to 1.94 percent, because of reduced liability risks.
Mahlum credited that improvement to some of the issues the Montana Chamber has tackled under its Envision project. One of those issues was the passage of a law in the last state legislature that helped reduce the cost of litigation by reining in the interest rates the court assesses on pending settlements. The state legislature reduced the 10 percent interest rate on pre- and post- litigation settlements, to 3 percent plus the current federal funds prime rate, which ties it more to market rates.
Envision 2026, the 10-year strategic plan of the Montana Chamber, focuses on a stable, predictable judicial system. The hope of the business community is that the justices will follow the rule of law and precedent to foster predictability and certainty in the legal arena.
“We are getting better,” said Mahlum, “but we have a lot more to do.” It is the Montana Chamber’s goal that Montana’s legal environment will rank among the top ten within the next ten years.
The Montana Chamber publishes its annual judicial report “to make people aware that the third branch of government impacts business. It is not just the governor or the legislature,” said Mahlum. It is a means, also, to hold the Supreme Court Justices accountable. “We want these justices to be principled in following the rule of law,” said Mahlum.
The Chamber is seeing “increased consistency from several justices,” said Mahlum, and that is what the Chamber considers a positive. It is not the outcome of specific decisions that the Chamber considers supportive for businesses, but predictability. “The question is, how often do they feel that a case should be determined by precedence or whether the law needs a new interpretation,” said Mahlum, “The Chamber falls on the side of predictability.” And, so do businesses. According to surveys 85percent of attorneys and senior executives reported that a state’s litigation environment is likely to impact important business decisions.
The Institute’s Executive Vice President Harold Kim noted that a major reason for Montana’s climb in the ILR’s Lawsuit Climate Survey, was for “improvement in its turnaround on meaningful venue requirements. These were strengthened thanks to the U.S. Supreme Court’s 2017 decision to overturn a Montana Supreme Court ruling that would have allowed the state’s courts to rule on a federal liability law.”
The case involved two BNSF employees who were injured on the job and filed suit against their employer in Montana. Neither of the plaintiffs were Montana citizens; in fact, they were each from different states, but their attorneys wanted to file the case in Montana, where BNSF has operations. “Montana should have nothing to do with it,” explained Mahlum, “but our Supreme Court took it up.” Their attorneys were seeking a venue where they believed they stood the greatest chance for a favorable decision. It’s called “venue shopping,” explained Mahlum, and when challenged the Montana justices ruled, six to one, in favor of the plaintiffs. That decision was overturned on appeal to the US Supreme Court, which concluded that a plaintiff must sue in either the state in which they were injured or in the state where the company’s headquarters are located, which in this case would have been Texas.
Montana’s worst score in ILR’s key element categories was 35th, in the overall treatment of tort and contract litigation.