Judicial Hellholes® 2006

The latest ranking of America's most unfair jurisdictions in which to be sued has been revealed in the American Tort Reform Foundation's 2006 Judicial Hellholes® report. Read the full report (1.3MB PDF) or start with the executive summary below.

Previous Hellholes reports are also available: Judicial Hellholes 2005, Judicial Hellholes 2004, Judicial Hellholes 2003 and Judicial Hellholes 2002 report (1.2MB PDF).

Executive Summary

Judicial Hellholes are places where judges systematically apply laws and court procedures in an unfair and unbalanced manner, generally against defendants in civil lawsuits. In this fifth annual report, ATRF found several interesting trends. Overall, the type of extraordinary and blatant unfairness that sparked the Judicial Hellholes project and characterized the report over the past few years has decreased across-the-board. This improvement is a shared result of shining the spotlight on litigation abuse with this report and the wise correction by both the judicial and legislative branches of state government. It may also indicate that litigation formerly concentrated in a single jurisdiction has dispersed across wider areas. This year's report includes several points of light shining out of Judicial Hellholes that show judges are stopping litigation abuse. For example, Madison County, historically the preeminent Hellhole, has significantly improved in fairness due to the efforts of some in the Illinois judiciary over the past two years.

The danger of regression, however, persists and is very real. The new leadership of the American Association for Justice (AAJ), formerly known as the Association of American Trial Lawyers of America (ATLA), has pledged to undertake a massive political and public relations campaign. We believe that this effort could counter reasonable efforts to increase the fairness and predictability of the civil justice system. New expansions of liability are on the rise, most notably with respect to so-called consumer protection lawsuits and public nuisance actions. For example, some courts have made extremely poor decisions, such as in Louisiana where the state's high court permitted a separate award for "hedonic damages," and in Rhode Island where a trial court vastly expanded public nuisance law. Some legislatures have also made mistakes, such as the California legislature's effort to fund parts of the state budget through punitive damage awards.

In addition, the Class Action Fairness Act (CAFA) reduces business for Judicial Hellholes in actions against out-of-state defendants by allowing such defendants to move their cases to federal courts. CAFA is of less use, however, when class actions are brought against businesses that are incorporated or have their principal place of business in the state. (See Dishonorable Mention for New Jersey on page 36). Cases are only assured of being transferred when more than two-thirds of the plaintiffs are from out-of-state. The bottom line is that CAFA sends an important signal to corporate CEOs regarding where they locate: "Be careful about locating in or near a Judicial Hellhole! You may be subject to more class actions with judges favoring plaintiffs."

2006 Judicial Hellholes

1. West Virginia
   West Virginia courts have "served as the home field for plaintiffs' attorneys determined to bring corporations to their knees."⁷ The state has a history of alliances and close personal connections among personal injury lawyers, the state's attorney general, and local judges. Personal injury lawyers prefer West Virginia courts because they can pick-and-choose where they file claims. Also, a state legal rule allows a claimant to collect cash simply by showing that he was exposed to a potentially dangerous substance, even if he has no sign of injury. The state is a popular venue for asbestos cases and, this year, the its high court invalidated a law enacted by the legislature to stem blatant forum shopping. West Virginia has recently been plagued by allegations of fraudulent lawsuits, including a phantom doctor who did not exist but signed medical documentation supporting lawsuits. Fake identities have been used at medical screenings, and a local physician is reportedly under investigation for making as many as 150 diagnoses of asbestosis a day.
2. South Florida
   South Florida has a reputation for high awards, improper evidentiary rulings, class actions, asbestos cases, and medical malpractice payouts. This year, the state's highest court threw out a $145 billion award against the tobacco industry, which included the largest punitive damage award in American history. It is an area where a lawyer once considered the "King of Torts" is accused of overcharging his clients and misappropriating $13.5 million in settlements to support his waterfront mansion, opulent lifestyle, and production of a series "B" movies. Appellate courts have reversed area trial courts for inappropriately certifying class actions, allowing people who are not injured to sue, and permitting junk science.
3. Rio Grande Valley and Gulf Coast, Texas
   Rio Grande Valley and Gulf Coast, Texas, have a reputation as a "plaintiff paradise." It is an area where extremely weak evidence can net multimillion dollar awards; jurors have relationships with the litigants in their cases; car accident lawsuits are decided without jurors knowing all the facts, including that the plaintiff was not wearing a seatbelt; and huge awards in asbestos cases are overturned due to junk science.
4. Cook County, Illinois
   Cook County, Illinois, is known for its general hostility toward corporate defendants. It hosts a disproportionate share of the state's lawsuits, has experienced a surge in asbestos claims, and is popular for class actions. Courts there often allow burdensome discovery, put expediency over the rights of defendants, make evidentiary rulings that favor plaintiffs over defendants, and welcome claims with little or no connection to the county. While the area's once robust manufacturing sector has been dealt a severe blow, the litigation industry is booming in Chicago.
5. Madison County, Illinois
   Extraordinary changes in Madison County, Illinois, that began in 2005 and gained momentum in 2006, have led ATRF to move the area up from the worst-of- the-worst to "purgatory". Lawsuit filings, including class action and asbestos cases have declined dramatically. Local judges have taken action to stop the type of blatant forum and judge shopping that for many years characterized Metro East. Such a reputation does not fade fast, and civil defendants still shiver at the prospect of facing a lawsuit in Madison County.
6. St Clair County, Illinois
   St. Clair County, Illinois, continues to host a disproportionate number of large lawsuits, about double the number of suits seen by trial courts in Illinois counties with similar populations. Class action fillings surged more than tenfold between 2002 and 2004 and filings continued to increase in 2005. While class action filings have substantially dropped in neighboring Madison County, St. Clair seems more resistant to change. Many claims are brought on behalf of people who do not live in the county or involve events that occurred outside of Illinois altogether.

With high-profile issues such as class action abuse, pharmaceutical liability and asbestos lawsuits, extraordinary awards often dominate headlines. But being cited as a Judicial Hellhole is nothing to celebrate. Litigation abuse ultimately hurts the people living in these jurisdictions the most - by limiting economic growth and access to health care, among other things.