Governor’s Job Creation Plans Good for No One

Perhaps lost under the glare of the spotlights on Wisconsin’s union law changes this year are several proposed changes in other areas of law which arguably will have an equally disproportionate effect on “regular folks.”  Wisconsin Governor Scott Walker recently called for a second special legislative session in 2011 – this time to address job creation.  Thirty bills have been proposed.  Some have an obviously discriminatory effect and seem to have little, if any relationship to job creation.

One bill, among other things, immunizes manufacturers and sellers of medical devices from suits once those devices have been approved by the Food and Drug Administration (“FDA”).  The purpose of such immunity is difficult to understand – one political science professor suggested that such immunity would “relieve manufacturers of the anxiety of unwanted litigation.” But what about manufacturing devices that hurt consumers or that don’t  do what they claim to do?  I’m sure manufacturers will be “relieved” for not having to be accountable for causing harm, but is that really the goal?  Preventing frivolous litigation may be a legitimate objective, but from a company’s perspective, all litigation in which it finds itself a defendant is “unwanted.”  The question is whether it is warranted.

What is even more difficult to understand is how such a bill will help job creation.  The theory is that pro-business laws will encourage manufacturers to set up shop in Wisconsin, which will then create jobs in the state.  But presumably, a manufacturer or seller of medical devices would not want to limit distribution or sales to only Wisconsin residents.  Under tort theories, for example, the site of the injury determines the applicable law.  So even if a medical device were manufactured in Wisconsin, if an Illinois resident purchased it and was injured using it in Illinois, Illinois law would apply and the Wisconsin statutory immunity would be irrelevant.  All the law would seem to do is prevent injured Wisconsin residents from suing the manufacturers and sellers of devices that harm them – which hardly seems incentive enough for manufacturers to choose Wisconsin over other states.

Another bill reduces post-judgment interest for personal injury claimants or consumers who successfully sue to 1% over prime (currently 4.25%), down from 12%.  Banks, landlords and credit card companies are still eligible for the 12% that has been in effect for decades.  It is hard to come up with a justification for the distinction between different types of plaintiffs – even a desire to curb “unwanted” or “frivolous” litigation doesn’t apply in this case.  The interest rate applies in cases in which the claimant has been successful – so by definition not a frivolous case.  And it is unclear what jobs this bill would create.  Has the 12% post-judgment interest on successful lawsuits really been a big deterrent from businesses moving to or incorporating in Wisconsin?  Seems pretty unlikely.

It must just be that proponents of these bills, and others, want to portray Wisconsin as pro-business.  But, at least in these cases, the pro-business justifications don’t hold water, are unlikely to create jobs and are pretty squarely against the interests of injured Wisconsinites.

Photo Credit: Richard Hurd