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California Replaces Reforming Philly Atop 'Judicial Hellholes ®' List, Joined by Jurisdictions in West Virginia, Illinois, New York and Maryland

Reports 'Points of Light' Celebrate Plenty of 'Good News' While 'Watch List' Looks at Problems in Pennsylvania, Florida, Illinois, New Jersey, Nevada and Louisiana

CONTACT: Darren McKinney dmckinney@atra.org
202-682-0084
FOR IMMEDIATE RELEASE

Washington, DC, December 13, 2012 -- With a sizeable majority of Americans concerned that an unbalanced civil justice system and excessive liability hurt economic growth, job creation and U.S. competitiveness, the American Tort Reform Association today released its annual Judicial Hellholes ® report, documenting abuses of the civil justice system in jurisdictions it says are among the most unfair and out-of-balance in the nation.

Civil courts in California top the 2012-2013 rankings of Judicial Hellholes, replacing courts in Philadelphia that, after previously ranking #1 for two consecutive years, have undertaken encouraging reforms.  No significant signs of much needed reform can be found in the barely solvent Golden State, however, as preposterous consumer class actions, coercive disability access lawsuits and mounting asbestos litigation, among other problems, continue to drive businesses and jobs to less litigious neighboring states while court budgets are slashed and dockets grow evermore backlogged.

Lingering troubles with an unbalanced playing field earn West Virginia the second-place ranking, though the electoral defeat of the state’s long-serving attorney general in November indicates voters there oppose the pro-lawsuit status quo. 

Madison County, Illinois earned the #3 ranking with filings of new asbestos lawsuits in the small, rural jurisdiction poised to set another record.  And New York City’s mounting tort liability, thanks in part to antiquated state liability law, and an asbestos tort kingpin’s efforts to make Baltimore the new Philadelphia when it comes to asbestos litigation justify fourth- and fifth-place rankings for those Eastern Seaboard jurisdictions.

As noted above and prompted by attention from Pennsylvania’s top judge, significant reforms initiated in Philadelphia’s Complex Litigation Center this past February have obliged ATRA to “give credit where credit is due” and ease the City of Brotherly Love’s courts out of the Judicial Hellholes rankings and on to the report’s marginally less critical Watch List.

Referring respectively to the chief justice of Pennsylvania’s Supreme Court and to the Philadelphia courts’ chief administrative judge, ATRA president Tiger Joyce said, “ATRA is encouraged to know that serious-minded jurists, led by Chief Justice Ronald Castille and Judge John Herron, took our criticisms of Philadelphia as they were constructively intended.  Their desire to render justice fairly for all parties with matters rightly before Philadelphia courts was the basis for the encouraging reforms we’ve seen thus far, and the courage and willingness of such judges to challenge the status quo should be an example for all Keystone State policymakers as they redouble broader reform efforts.”

“Climbing out of a judicial hellhole and staying there isn’t easy,” added Joyce.  “But it has been done by other, ultimately reform-minded jurisdictions, and Philadelphia is working to join them.  Assuming trial judges will live up to both the letter and spirit of Judge Herron’s [February 15] reform order, and hopeful that the much-needed capstone of venue reform will soon be added to keep lawsuits out of Pennsylvania jurisdictions where they have no business being heard, ATRA members would like to see Philadelphia stay off the Judicial Hellholes list indefinitely.”  

ATRA general counsel Victor Schwartz observed, “It is a bright spot when courts, such as Philadelphia’s Complex Litigation Center, reform themselves and seek to be fair.  A key point about the Judicial Hellholes project is that we simply seek a level playing field for all parties, not plaintiff- or defendant-tilted courts,” said Schwartz.  

Schwartz also noted the continued progress in South Florida, which moved from the Judicial Hellholes rankings to the Watch List due to targeted legislative actions that have reined in excessive liability.  “The latest achievement is reform of the state’s no-fault auto insurance law, which allowed abusive and fraudulent litigation that contributed to rising auto insurance rates.”

Rounding out this year’s Watch List are once-and-possibly-future Judicial Hellholes Cook County, Illinois, New Jersey, Nevada and Louisiana.

Moving to the “good news” celebrated by the report’s Points of Light, ATRA lauds “fair and balanced” judicial decisions made this year by five state supreme courts and a superior court in California, Illinois, Kansas, Mississippi, New Jersey, Pennsylvania and Texas.  Enactment of positive legislative reforms in Alabama, Arizona, Iowa, Louisiana, Mississippi, Missouri, Ohio, Rhode Island, Tennessee, and Wisconsin also are singled out for kudos.

 “As anemic economic growth and high unemployment continue to plague much of the country, many governors and state legislators were again determined to make their states more competitive and attractive to employers,” Joyce observed.  “Considering that employers consider litigation environments when deciding where to expand or relocate, it’s no surprise that a variety of tort reform measures figured prominently in policymakers’ pro-growth, job-creation agendas.”

Finally, this year’s Judicial Hellholes report, for the first time, scrutinizes some of the “worst and best” federal appellate court decisions.  “The innovation is in the criteria for determining whether a federal appellate court decision is sound or unsound,” explained Schwartz.  “Did the appellate court follow the instructions of the U.S. Supreme Court; did the court properly apply the applicable state law; and did a federal court, as is sometimes the case with state courts in Judicial Hellholes, interpret the law expansively in a way that allows abusive litigation?”

Full text of the thoroughly documented 48-page Judicial Hellholes report and year-round updates are posted at JudicialHellholes.org.  For easy reference, an executive summary of the 2012-2013 report follows immediately below.

Executive Summary

JUDICIAL HELLHOLES 2012/2013

The 2012-2013 report shines its brightest spotlight on five areas of the country that have maintained or newly developed their reputations as Judicial Hellholes:

#1            California is the undisputed heavyweight champion of the consumer class action.  Its plaintiff-friendly laws spur ridiculous lawsuits against companies that sell products ranging from breakfast cereal to bagged walnuts.  California’s small businesses have been under siege from trolling disability-access lawyers and their professional plaintiffs who look for technical rules violations, then demand thousands of dollars to settle.  The state enacted modest reform this year only after a threat of federal intervention.  Los Angeles is seeing a surge of asbestos cases, as personal injury law firms from elsewhere have moved into in Southern California.  California’s limit on pain and suffering awards in medical malpractice cases, which has contributed to a stable healthcare environment for many years, is under constant attack.  Mounting cuts to the judiciary’s budget, and loss of court staff, particularly in Los Angeles, leave litigants to worry about delays and even the ability to appeal adverse rulings.

#2            West Virginia is feared by business defendants, who feel that some Mountain State judges tip the scales of justice against them.  The lack of a full right to appeal adds to their anxiety.  The state’s personal injury law remains out-of-the-mainstream, although its high court deserves recognition for some sound rulings.  The electoral defeat of West Virginia’s long-serving Attorney General, Darrell McGraw Jr., in November 2012, came too late to affect the state’s ranking, but could contribute to a fairer legal environment in the years ahead.  AG McGraw was known for partnering with plaintiffs’ lawyers to sue businesses on a contingent-fee basis, operating his office as a virtual personal injury law firm, and using settlement money for his own favored causes and self-promotion.

#3            Madison County, Illinois is known as the nation’s asbestos court and, this year, it is on track to beat its lawsuit record, set in 2003, when the county was thrust into the national spotlight for litigation abuse.  The county finally decided to abandon its unique and controversial system of assigning trial dates to favored local law firms after it was revealed that the judge who oversaw the asbestos docket received tens of thousands of dollars in campaign contributions from lawyers in those same firms.  The money has since been returned and the asbestos docket is under new management.  The election of a former head of the Illinois plaintiffs’ bar to the appellate bench overseeing its courts provides new reason for concern.

#4            New York City and Albany, New York, the financial and political capitals of the state, have collectively fostered the Judicial Hellholes reputation of “Sue York.”  Each year, New York City faces more than a half-billion dollars in tort liability from lawsuits alleging falls on sidewalks, inadequate care in hospitals, or mistreatment by police.  Businesses also face extraordinary liability, such as through a unique state law that imposes liability on those who undertake construction projects, regardless of who is at fault.  The city also hosts more than its share of fraudulent claims, and the solid hold of plaintiffs’ bar over the legislature continues to stymie needed reforms.

#5            Baltimore, Maryland, after several years on and off the “Watch List,” rounds out the Top 5.  Three years ago, ATRF noted that plaintiffs’ lawyers referred to Baltimore among the “home run jurisdictions” for asbestos cases.  Since then asbestos filings have surged, largely driven by tort kingpin Peter Angelos, owner of the Baltimore Orioles.  Angelos is seeking to consolidate thousands of claims, which, if permitted, would place expediency over fairness.  Also on the minds of those who face litigation in Baltimore is a case before Maryland’s highest court, in which some plaintiffs’ lawyers – not elected state lawmakers -- are seeking to end longstanding legal doctrine that bars recoveries by plaintiffs who are at fault for their own injuries.  Such a significant change would disrupt many aspects of Maryland personal injury law, erode personal responsibility, and fuel more lawsuits.

 

WATCH LIST

Beyond the Judicial Hellholes this report calls attention to six additional jurisdictions that also bear watching due to their histories of abusive litigation or troubling developments.  Watch List jurisdictions fall on the cusp—they may drop into the Hellholes abyss or rise to the promise of Equal Justice Under Law.

  • Philadelphia, Pennsylvania takes the most significant drop in this year’s report, from the #1 Judicial Hellhole to the top of the Watch List.  The judiciary, led by Court of Common Pleas Chief Administrative Judge John W. Herron unveiled a plan to level the playing field for mass tort cases handled by the Complex Litigation Center (CLC).  The CLC also is under new management, providing another reason for optimism.  A new state law now better aligns the liability of defendants with their share of responsibility.  Enacting legislation that curbs forum shopping in personal injury cases, which allows so many lawsuits to flow to Philadelphia, is the next needed step to keep the city off the Judicial Hellholes list.

 

  • South Florida has dropped from the Judicial Hellholes list, on which it had been cited the past nine years, largely as a result of gradual success at addressing excessive liability and litigation abuses highlighted in this report.  The latest achievement is reform of the state’s no-fault auto insurance coverage law, which had led to an alliance between personal injury lawyers and fly-by-night clinics that milk the system and drive  up Florida’s insurance rates.  Florida still has its problems, such as gamesmanship of the state’s bad faith law.  The outcome of a pending challenge to the state’s limit on noneconomic damages in medical malpractice cases, which has particularly improved access to healthcare in South Florida, could influence where this jurisdiction lands next year.

 

  • Cook County, Illinois remains on the Watch List, after falling from previously perennial Judicial Hellholes status last year, largely because the litigation winds have remained relatively calm in Chicago.  But many still regard Cook County as among the most unfavorable litigation environments in the country.  It remains the home of expansive liability and excessive verdicts.  Some are overturned on appeal, such as the $3.9 million award to a teenager who was injured when he repeatedly attempted to jump aboard a moving train to show off for friends.  Cook County is also facing scrutiny due to the retention of judges who received poor reviews from bar associations, including one who pled insanity.

 

  • New Jersey showed signs of improvement in the past year with an important court decision that shields name-brand drug makers from unfair liability in claims involving generic drugs made by competitors, and with what may be a new trend toward fairness in other lawsuits against the state’s key pharmaceutical industry.  But medical liability cases continue to pop up like weeds in the litigious Garden State, and there seems to be no shortage of  plaintiffs and personal injury lawyers otherwise willing to make outrageous claims against Little Leaguers, life-saving police officers and girlfriends who send their boyfriends text messages.

 

  • Nevada, which has been featured in past reports due to the influence of the personal injury bar and jackpot verdicts in Las Vegas, is of particular concern this year due to the state attorney general’s aggressive use of contingent-fee lawyers to enforce state law.  These private lawyers, who hail from places such as Washington, D.C., are compensated based on the amount of the fines they impose on businesses.  The attorney general and those who have faced such lawsuits are battling in court over the propriety of such arrangements.

 

  • Louisiana has among the highest, and still rising, auto insurance rates in the nation, due to the state’s litigious environment, aggressive personal injury bar, excessive damage awards, and plaintiff-friendly judges.  The state’s uniquely high monetary threshold for obtaining a jury trial ensures that plaintiff-friendly judges serve as juries, too, in many cases.  But thanks to committed lawmakers, Louisiana also finally addressed “legacy lawsuits,” which have unfairly targeted the state’s oil and gas industry, costing thousands of jobs.  Many still raise questions, however, about the influence of the plaintiffs’ bar over Gov. Bobby Jindal and other state officials.

 

DISHONORABLE MENTIONS

Dishonorable Mentions in this report go to the Missouri Supreme Court for striking down the state’s limit on subjective noneconomic damages in medical liability lawsuits, and to the Washington Supreme Court for imposing liability on makers of protective equipment if they do not warn workers of the dangers of contaminants that the equipment protects against.

POINTS OF LIGHT

This year’s report again enthusiastically emphasizes the good news from some of the Judicial Hellholes and other jurisdictions across the country.  “Points of Light” are examples of, among other things, fair and balanced judicial decisions that adhere to the rule of law and positive legislative reforms.

  • Sound rulings by several courts, some of which are located in states that otherwise have reputations as inhospitable to civil defendants, are particularly worthy of note.
    • The California Supreme Court properly recognized that companies are not liable for products of others that are attached to their own products after sale.
    • The Illinois Supreme Court rationally found that landowners are not liable to trespassers who ignore obvious dangers.
    • The Kansas Supreme Court rejected an attempt to nullify the state’s limit on subjective noneconomic damages in personal injury cases.
    • The Mississippi Supreme Court ruled that the state’s attorney general cannot payout millions of dollars in state settlement money, which are public funds, directly to hired contingent-fee lawyers.
    • The New Jersey Superior Court recognized that brand-name prescription drug makers are not liable for the injuries alleged by those who used competing generic products.
    • The Pennsylvania Supreme Court rejected expert testimony asserting that exposure to any amount of asbestos fibers, no matter how small, can be a substantial factor in causing an asbestos-related disease.
    • The Supreme Court of Texas adopted the “learned intermediary” doctrine, which recognizes that drug makers have a duty to inform physicians of potential risks that may vary from patient to patient.

 

  • State legislatures in Alabama, Arizona, Iowa, Louisiana, Mississippi, Missouri, Ohio, Rhode Island, Tennessee and Wisconsin all enacted positive reforms.  Five states precluded a potentially radical expansion of the liability of home and business owners to trespassers.  Three states enacted good government laws providing safeguards when state officials use contingent-fee lawyers to enforce state law, including Mississippi, where the state attorney general had routinely relied on such arrangements.

 

SPECIAL FEATURES

This year’s report also includes two special features.

  • Food for Thought: Consumer Protection Lawsuit Abuse on the Rise documents the personal injury bar’s latest line of attack on food makers, such as Kellogg and Nature Valley, and restaurants, such as Taco Bell and McDonald’s.  State consumer laws, which were intended to provide a remedy for lost money in day-to-day purchases, are even being used as an alternative to showing the evidence necessary to recover in lawsuits for wrongful death and claims against drug makers.

 

  • In the Worst (and Best) Federal Appellate Court Decisions of 2012, this report explores new turf by spotlighting U.S. Court of Appeals decisions similar to those long associated with Judicial Hellholes.  The worst include: certification of a no-injury class action by the Sixth Circuit; the First Circuit’s complete disregard of a U.S. Supreme Court decision that found federal regulation, not lawsuits, govern generic drugs, and a Fourth Circuit decision allowing lawyers to sue first and troll for clients through use of private DMV records later.