NJLRA: Fostering Business Growth And Job Creation

Tuesday, November 2, 2010 - 00:00

Editor: Please describe your background.

Rayner: Prior to coming to NJLRA, I spent my career in government working for politicians who understood the importance of the government's role in empowering businesses to grow and create jobs. When I worked for Governor Whitman, I was a policy advisor, and among my responsibilities was working on economic development initiatives. I truly believe it is important that government provide a fair, predictable environment if business is to grow and create jobs. Reforming New Jersey's civil justice system is a critical part of that.

Editor: Tell us about the New Jersey Lawsuit Reform Alliance (NJLRA).

Rayner: We were formed in 2007 out of a concern among many of New Jersey's large employers, particularly in the life sciences and pharmaceutical area, about the growing threat of lawsuits in New Jersey. Today, we represent over 50 large employers and business associations, ranging from the Medical Society and the Restaurant Association to the New Jersey Chamber of Commerce, the New Jersey Business and Industry Association, as well as large companies like Johnson & Johnson - all of whom understand that lawsuit abuse can really inhibit job creation, hurting the small business owner as well as the large corporation.

Editor: Describe NJLRA's mission and what it has done to carry out that mission.

Rayner: NJLRA is a bipartisan, statewide group of employers and businesses who believe that we need a fair and predictable civil justice system to create an environment where New Jersey can compete for jobs. NJLRA's mission is to educate policy makers and the courts about that and try to find ways we can reform the law in New Jersey where it is being abused.

Editor: I know I have seen you at least at one LCJ meeting. How do you work with LCJ?

Rayner: We work closely with many groups around the country that work on tort reform. We work with LCJ, attend their events, and help facilitate LCJ's operations and activities here in New Jersey. We also work closely with the American Tort Reform Association and the U.S. Chamber's Institute for Legal Reform, both of which are critically important organizations for state groups like ours that rely on them for the resources, research, and policy that we need.

Editor: How do you go about fulfilling your mission?

Rayner: When we started, I was the only staff person on board. We have since grown to three. In addition to me, we have an office manager and a communications director. When we were formed, we spent the first year or so growing our membership and involving supporters in policy issues. For the last two years, we have been actively informing New Jersey's political leaders and the media about litigation abuse issues that make New Jersey less attractive to business than the neighboring states and advising them about ways to improve the business environment here.

Editor: What steps has NJLRA taken to determine the reasons for the failure of New Jersey to be as competitive in attracting new businesses and retaining existing business as other states?

Rayner: We commissioned studies and polling surveys of business attitudes about the legal climate in New Jersey as well as academic studies looking at New Jersey laws, particularly laws like the Consumer Fraud Act. Some of these studies compared the legal environment here with that of nearby states. We drafted corrective legislation addressing major issues, which has now been introduced along with information for legislators.

Editor: Do you have periodic meetings with your supporters?

Rayner: We do. We have at least two meetings per year with our membership, which provides a great opportunity for people to get together, talk about policy and listen to leading decision makers talk about the issues. We also have quarterly board and committee meetings.

We use our robust Web site to communicate with both our members and those who are interested in what we are doing. We also send out a weekly email containing news stories and reporting on policy developments here in Trenton.

Editor: How important has the legal climate been in discouraging businesses from coming to New Jersey or from succeeding here?

Rayner: New Jersey presents many challenges for businesses and those they employ, including the high cost of living, regulations, and taxes. The civil justice system is something businesses consider when deciding where to locate and expand. Unfortunately, one of our largest industries - the life sciences and pharmaceutical industry, as well as healthcare - is the most susceptible to litigation abuse because of the large number of people it serves.

When you sell medical devices and pharmaceutical products, you are servicing people who are, in many cases, facing a disease or a physical challenge that these items are helping them to overcome, and the results can vary across populations. It is important for the large industries that are critical to New Jersey's economic success that our laws be fair. We did a study in 2008 of all the mass tort litigation facing pharmaceutical manufacturers here in the state. It found that 94 percent of the plaintiffs in these cases were from outside the state. They chose to sue under New Jersey law and before New Jersey judges rather than in their home states because the legal environment here is much more favorable to their lawsuits.

The legal climate here is much worse than that in Delaware, Pennsylvania, or New York. Businesses here face a toxic combination of our Consumer Fraud Act, court rulings on things like the statute of limitations on discovery, and, most acutely, New Jersey's weak standards for expert evidence testimony in a courtroom. When you are talking about medical liability suits and product liability suits against manufacturers of medical devices and drugs, the quality of the expertise admitted in a courtroom is critical. When the door is wide open to unqualified witnesses and unscientific testimony, you get grossly unfair results.

Editor: Do you anticipate that Governor Christie will improve the legal climate in the state?

Rayner: We hope he will. He ran on a platform that included tort reform. He had three specific proposals in his campaign. One was limiting the abuse of the class action suit in New Jersey. Another related to forum non conveniens by making clear and fair rules on who can come into New Jersey from out of state to sue, and the last was to adopt an expert evidence standard. We have talked to the Governor's office about their policy goals for the next several years and are hopeful that they will take on tort reform at some level.

Editor: What steps has his administration already taken to remove burdens on business, such as reducing the amount of red tape?

Rayner: The governor has been very aggressive in trying to change the perception of New Jersey as a difficult place to start and run a business. He created a Red Tape Review Commission, which he appointed the lieutenant governor to chair. That has gotten underway quickly.

We are already hearing from some of our members about dramatic improvements in the regulatory climate in places like the Department of Environmental Protection. The governor has sent strong signals throughout his administration that he wants New Jersey to be responsive and hospitable to business. You are going to see that as he continues to work through various policy areas over the course of his term. The message from Governor Christie is that New Jersey is open for business again.

Editor: You've mentioned some of the judicial decisions and rules that are a burden on business. Are there any others that you'd like to mention?

Rayner: I mentioned earlier the Consumer Fraud Act. New Jersey's Consumer Fraud Act is a powerful weapon for consumers, and to some extent, it certainly should be when consumers are truly being defrauded. Instead of helping consumers who have been defrauded by an unethical business, it is now being used routinely by plaintiffs around the country to file large class action lawsuits against businesses in New Jersey for technical violations, minor issues, and minor noncompliance with consumer protection rules and regulations.

Even the courts have gotten in the game of weakening the Act. Just recently, in Bosland v. Warnock Dodge, the New Jersey Supreme Court ruled that a customer has no duty to notify a business of his issue and seek a remedy before filing suit. The way I read that decision is that if you have been double-billed for a product or service by a merchant, you can sue them before you simply ask for your money back. The court is sending exactly the wrong message to the business community. It's creating a trap for businesses that want to do the right thing by not just protecting consumers from unethical or fraudulent businesses, but also by penalizing businesses that are eager to correct mistakes, if brought to their attention. Given the provisions in the Consumer Fraud Act for treble damages and recovery of attorneys' fees, this decision provides a powerful incentive for the trial bar to encourage suits against legitimate businesses.

Editor: What are some of the highlights of the Alliance's efforts to encourage the legislature and courts to change the legal climate in New Jersey?

Rayner: We are supporting two pieces of corrective legislation.

One is an appeal bond cap expansion bill (S-480/A-2473). This would expand New Jersey's $50 million bond cap for tobacco companies to cover all civil defendants. This would reduce the cost of appealing an adverse judgment. It is important legislation that will make it financially possible for businesses to appeal runaway jury verdicts, which are increasing in number and in amount.

The other (A-3333) would reform the New Jersey Consumer Fraud Act. It was introduced this fall by Assemblyman John McKeon, a Democrat from Essex County. It is a bill we designed and on which we worked, along with the assemblyman and some leading defense trial attorneys, to modernize New Jersey's Consumer Fraud Act to continue to protect consumers while closing the door on abuses.

We also quite regularly submit amicus briefs to the Appellate Division and the State Supreme Court on behalf of members when they think there is a particularly important legal precedent at stake in an appellate decision, and we consistently articulate to the court the importance of their decisions in creating a climate of fairness and predictability for employers in New Jersey.

Please email the interviewee at mrayner@njlra.org with questions about this article.