Are judicial elections bad for business?

Yes, says the Manhattan Institute's Walter Olson in a blog post. Olson, who has been deftly criticizing our society's litigiousness for years at, argues against what he sees as a trend in the business community toward support for direct election of state court judges. The argument has been that merit-screening panels and gubernatorial appointment systems are prone to capture by interests hostile to business, like trial lawyers. If judges are elected, the thinking goes, litigation outcomes will be fairer and more predictable. Olson responds:

Federal judges, who of course are exclusively selected by appointment rather than election, are widely seen as upholding a general standard of quality well above that of their state brethren. Business defendants in particular overwhelmingly seek to have their cases heard in federal court rather than state. Again, business litigants widely regard the judicial process of most other advanced democracies — in Western Europe, Japan, Canada — as more predictable and rational than that of state courts in the U.S. And again, in those other advanced democracies, elected judgeships are virtually unknown, being widely seen as part and parcel of the distinctive "American disease" of law.

When you get down to comparisons between particular states, the sorts of outrages of which business has long complained — runaway juries, outlandish punitive damages, judges who practice "home cooking" favorable to local chums — have long been concentrated in the same states where partisan judicial election is the order of the day. Most of the fabled nightmare jurisdictions — south Texas, Alabama, the Bronx — were and are places where judges run for election. Meanwhile, Delaware, known as the state most favored by business in litigation, had and has appointive judgeships. Alex Tabarrok and Eric Helland have found strong evidence that where judges are elected on partisan ballots, trials result in higher verdicts against business defendants and specifically against out-of-state business defendants.


So what explains the otherwise baffling admiration of some business advocates for an institutional arrangement they once rightly distrusted? A major factor, surely, is that in the last decade or two a coalition led by the U.S. Chamber of Commerce has enjoyed great success in pouring campaign contributions into high court races, in the process transforming some of the state high courts formerly most hostile to business defendants, such as Alabama, Texas, and Michigan, into courts highly skeptical of many of the excesses of litigation. . . . But it is a mistake to observe a tide that has been sweeping out to sea, and conclude that it will continue to sweep out indefinitely. It is hard to deny that the substantive improvement in some of these courts has been bought at a cost of politicization and polarization which inevitably invites the other side to respond in kind when its day comes.

If you're interested in these issues, it's worth reading Olson's entire post. Having lived and practiced for years in Texas, where state court judges are elected on partisan ballots, I'm sympathetic to Olson's preference for some form of merit selection system (perhaps tempered by retention elections). I'm inclined to think the quality of the judiciary — in terms of expertise, understanding of the law, levels of corruption, and temperament — is on average better when judges are appointed and don't face the myriad pressures of democratic politics.

An objection to Olson's argument could be that in theory, at least, there's no reason one system rather than another will systematically favor or disfavor any particular set of interests, business or otherwise. If the enemy is trial lawyers, for example, it's possible for them to exert inordinate influence over either a merit system or an election system; the first through bar connections and donations to gubernatorial campaigns, and the latter through judicial campaign contributions. Any special-interest group will have the motivation, and some will have the means, to help produce results they favor given either selection system. On the one hand, elections might excite populist sentiments and demagoguery against the wealthy and big business. On the other hand, business interests have been politically very successful inveighing against what they deride as greedy trial lawyers and frivolous lawsuits. But Olson makes a good argument and provides some evidence that, on the whole, business interests are better served by a merit system where the judges themselves are more likely to understand the law and try to apply it in a principled way.