The text below is excerpted from ATRA's
Judicial Hellholes® 2006 report
published last December.

South Florida, primarily Miami-Dade and Palm Beach counties, consistently makes the list of Judicial Hellholes for its high awards, improper evidentiary rulings, class actions and medical malpractice payouts. The events of the past year show that South Florida's well-earned reputation continues to grow. South Florida is also home to Lewis S. "Mike" Eidson, the new president of the American Association for Justice, formerly known as the Association of Trial Lawyers of America. Mr. Eidson has vowed to fight efforts by the American Tort Reform Association, the Institute for Legal Reform, and others working to promote rationality and fairness in our civil justice system. 113

A Reputation for High Awards Continues

South Florida is known for its high awards. For example, in most jurisdictions, an award to a person who contracted mesothelioma due to asbestos exposure would range between several hundreds of thousands of dollars to a few million dollars. But in South Florida, a mechanic who had alleged exposure from working on friction brakes received $31 million, the largest reported asbestos verdict of 2005. 114 Also, a Palm Beach County court awarded billionaire financier Ron Perelman $1.58 billion ($850 million in punitive damages on top of a $727 million compensatory award) based on allegations that Morgan Stanley covered up the financial health of Sunbeam, a camping equipment company, when it sold the firm to Perelman. Morgan Stanley has appealed the decision on the grounds that it was not permitted by the trial judge to fully defend itself.115

Perhaps the most extraordinary award out of South Florida was the $145 billion award against the tobacco industry. This verdict is believed to be the largest punitive damages award in American history. The 2000 verdict came out of a class action suit on behalf of all smokers in the state after a two-year trial in Miami. In 2003, an intermediate appellate court overturned the award in a harshly worded opinion, finding that the trial court conducted "a fundamentally unfair proceeding."116 The appellate court found it was improper to certify the class when each individual smoker would need to show that smoking caused their particular illness and, with respect to fraud claims, that each plaintiff relied on the representations at issue.117 In addition, the intermediate appellate court ruled that the trial court "put the cart before the horse" in awarding punitive damages before determining compensatory damages, a procedure that violated the due process standards required by the United States Supreme Court.118 Finally, the court found that the excessive award fl owing from the "runaway jury" was a result of "numerous improper comments," including comparing the sale of cigarettes to slavery and the Holocaust, and asking the jury to disregard the fact that the sale of cigarettes is legal.119

In July 2006, the Florida Supreme Court agreed with the intermediate appellate court that a $145 billion punitive damages award violated due process and was excessive.120 In a split decision, a majority of the court let stand factual findings made in the trial court with respect to the defendants' conduct and smoking's causal link to certain diseases.121 This will allow members of the class to proceed with individual actions in which they will need to show that they smoked the defendant's product. But they will not have to prove the product caused their particular disease. If they allege fraud to make their case, they will have to show that they relied on the defendant's statements, but they will not have to prove that the product was defective or that, in general, it causes a wide variety of cancers.

As one of the plaintiffs' lawyers commented, allowing the class action factual findings to stand "makes these cases very attractive to lawyers because they're 90 percent of the way to the finish line."122 South Florida should brace itself for many more lawsuits by smokers and, indeed, a Palm Beach attorney has predicted that the court "is going to be flooded with them."123 Other South Florida attorneys reportedly predicted "an avalanche" of future claims, noting that it was estimated that the class action covered 300,000 to 700,000 Florida smokers, each of whom could now opt to bring lawsuits of their own over the next year.124

When large numbers of asbestos claims were filed in Miami-Dade, Broward and Palm Beach counties, the courts created a "rocket docket" that encourages settlements.125 This measure, which establishes rules and time limits for case resolution, has "resolved" as many as 5,000 cases since its inception, leaving fewer than 20 going to trial.126 While this expediting practice certainly cuts down on the number of outrageous jury verdicts, it also prods defendants toward settlements with unimpaired plaintiffs. To curb such abuse, some judges, such as Palm Beach Circuit Court Judge Timothy McCarthy, have taken more aggressive action to dismiss claims that should be filed elsewhere.127 But these efforts to discourage forum shopping have actually been hindered by Florida appellate courts in some cases.128For example, the state's Fourth District Court of Appeal overturned two of Judge McCarthy's asbestos venue rulings in 2005, and this will likely lead to similar appeals by plaintiffs in at least 80 other asbestos cases. In other words, that translates into 80 more suits for South Florida and 80 more expedited settlements.

Scandalous Miami

Miami-Dade also is home to one of the numerous asbestos scandals that demonstrate how mass tort litigation can be abused. More than 4,000 asbestos victims are suing both the Florida Bar Association and Louis Robles, a lawyer purportedly representing them in a proposed class action. Robles, who shut down his legal empire in October 2002 and left his client files laying on the floor of a West Miami-Dade warehouse129, was once considered the "King of Torts" and lived in a Key Biscayne waterfront mansion. His asbestos clients filed a complaint with the Florida Bar alleging that he overcharged them and misappropriated about $800,000 of their funds.130 The bar took away his license in 2003.

Recent reports suggest, however, that the bar complaint addressed just the tip of the iceberg. The latest lawsuit now charges that after Robles reached settlements with asbestos manufacturers, he would deposit the payouts in his trust account and then steal them, instead of mailing them to clients, as promised. They claim that he stole $13.5 million in settlements.131 According to the complaint, Robles orchestrated a "bold but fraudulent scheme to steal millions of dollars from over 4,000 asbestos clients . . . to support his flagrant lifestyle and his production of a series of 'B' movies."132 The new lawyer for the asbestos claimants went after the Florida Bar because it refused to compensate the asbestos victims out of its security fund program, which compensates individuals wronged by their lawyers.

Robles, who routinely traveled by limousine and private jet, pled not guilty in May 2006 to 41 counts of mail fraud.134 The indictment charges that he stole client money to fund his Florida mansion, apartments in New York and Los Angeles, a condominium in Telluride, Colorado, an investment in a movie production, and to pay his ex-wife's alimony. Prosecutors say that at least 4,500 of his 7,000 clients were victims of theft. Not only have asbestos clients found themselves subject to lawyer misconduct, but the City of Miami was duped when a deal negotiated by its city manager and a plaintiffs' lawyer went bad. In 2004, Miami settled for $7 million a lawsuit claiming that the city unconstitutionally imposed a fire-rescue fee. But instead of the money going to reimburse 80,000 potential taxpayers, just seven people divided the settlement, and the lawyers planned to take a $2 million share. How did they get away with it? They claimed that since the judge had never formerly certified the case as a class action, they were free to settle on their own. Much of this came to light earlier this year. The court, feeling duped by the lawyers involved, vacated the settlement in March 2006 and ordered the return of $3.5 million of the settlement.135 The court then allowed the class action, which is expected to settle quickly on behalf of all taxpayers, to proceed. The Miami Herald has called upon the Bar "to investigate the conduct of all of the lawyers involved - and punish anyone who has violated legal standards."136

Reversed: No Class Actions for Those with No Injuries

Inappropriate certification of class actions and allowing people that are not injured to file lawsuits are two characteristics of Judicial Hellholes. Both of these elements came together in a Miami-Dade trial court's certification of a class action on behalf of uninjured women who used the hormone replacement therapy, Prempro, a drug that continues to be approved by the FDA.137 The lawsuit sought medical monitoring on behalf of those that used the drug after a study showed an increased risk of breast cancer and other conditions when used by certain patients. Even the plaintiffs' expert conceded that Prempro may only be hazardous when prescribed for prevention of cardiovascular disease, a use not approved by the FDA, while the plaintiffs used the drug for osteoporosis, and the lead plaintiffs' physician admitted that he continues to prescribe the drug.138 In a February 2006 ruling, the appellate court reversed the trial court. It found that treating all of the individual cases together as a class action was inappropriate because plaintiffs used the drug for different purposes and for different lengths of time, and had different risk factors.139 It also found that the lead plaintiff was not suited to represent the class members because she stopped taking the drug after its potential adverse effects were discovered, did not read the drug's label, did not see the manufacturer's advertisements, and was warned of the risks of the drug by her physician.140 Finally, it found that a medical monitoring program would do no more than cover the regular examinations that all women are advised to complete regardless of whether they used the drug or not.141 The court concluded with a warning against junk science: "[T]he courtroom is not the place for scientific guesswork even of the inspired sort. Law lags science[;] it does not lead it."142

Some who criticize the naming of Judicial Hellholes may argue that a reversal of a poor decision shows that the system works. But unfair treatment at the trial court level still costs defendants considerable time and money and may adversely affect a company's stock price and its ability to provide jobs.

Steps Forward

In past years, Florida has taken steps to address unfairness in its civil justice system. For example, in 2003, the Sunshine State enacted modest reforms to address the stampede of doctors being chased from South Florida by high malpractice premiums that included limits on non-economic damage awards to $500,000 for individual practitioners and $750,000 for medical institutions.143 The following year, Florida voters passed a constitutional amendment limiting contingency fees for plaintiffs' attorneys in medical malpractice actions to 30 percent of the first $250,000 and 10 percent of any additional amount.144 Last year, the legislature addressed South Florida's reputation as a magnet for asbestos and silica cases brought by out-of-state claimants by providing that only those who have a physical impairment resulting from their exposure may move forward with their suits.145 The legislation was expected to weed out as many as 4,500 speculative claims while prioritizing the claims of the truly sick.146 Personal injury lawyers, however, have sought to overturn the new law and the question of its constitutionality is now pending before the Florida Supreme Court.147

In March 2006, the Florida legislature abolished joint and several liability148, a law that encouraged plaintiffs to target "deep pocket" companies even if they had little responsibility for the injury at issue. In fact, the support of South Florida legislators was crucial to moving the proposal forward in the state Senate.149 Under the old law, if a person was injured and there were multiple defendants (e.g., a hospital, doctor, nurse and anesthesiologist; or a manufacturer, distributor and retailer), some of those defendants could have been required to pay more than their fair share of the judgment if one or more of the others were unable to pay. Under the new law signed by Governor Jeb Bush, each defendant will be responsible for paying his or her fair share of the judgment, not more, not less.150 In completely abolishing joint and several liability, Florida joined its neighbors Georgia, Mississippi and Louisiana in hopes of attracting new businesses to its region of the country.151

Additionally, in April of this year, the Florida legislature enacted laws restricting rampant "litigation tourism" by out-of-state lawyers looking for favorable courts and protecting the right of a civil defendant to appeal.

Notes

113. See Patrick Danner, 5 Questions With Mike Eidson: Recasting the Image of Trial Lawyers, Miami Herald, Aug. 7, 2006, at G10.

114. See Florida Asbestos Jury Awards $31M in Friction Brake Case, 20-22 Mealey's Litig. Rep. Asbestos 1 (Dec. 21, 2005).

115. See Bill Douthat, Bank Argues to Dump $1.58 Billion Award, Palm Beach Post, June 29, 2006, at 1B.

116. Liggett Group Inc. v. Engle, 853 So. 2d 434, 470 (Fla. Ct. App. 2003).

117. See id. at 442-50.

118. See id. at 450-56.

119. See id. at 456-70.

120. See Engle v. Liggett Group, Inc., No. SC03-1856, 2006 WL 1843363, at *8-11 (Fla. 2006).

121. See id. at *22.

122. Larry Keller, $145 Billion Tobacco Suit Reversed, Palm Beach Post, July 7, 2006, at 1A (quoting plaintiffs' attorney Andrew Needle).

123. Id. (quoting Bob Montgomery, the lead attorney in Florida's lawsuit against cigarette manufacturers).

124. Jon Burstein, Court Deals Blow to Group Lawsuits Against Tobacco, Orlando Sentinel, July 7, 2006, at A1.

125. Dan Lynch, Asbestos Suits Get New Life in Florida, Daily Business Review, Oct. 14, 2005, at http://www.law.com/article.jsp?id=1129194311226.

126. See id.

127. See id.

128. See id. (discussing Sanders v. Union Carbide Corp., 911 So. 2d 1256 (Fla. Ct. App. 2005); Fox v. Union Carbide Corp., 910 So. 2d 422 (Fla. Ct. App. 2005)).

129. See Jay Weaver, Asbestos Clients Sue Florida Bar for Millions, Miami Herald, Jan. 11, 2006, at B1.

130. See Curt Anderson, Miami Lawyer Charged With Defrauding Asbestos Clients, Assoc. Press, May 23, 2006.

131. See id

132. Id. (quoting complaint).

133. See id.

134. See id.

135. See Scott Hiaasen & Michael Vasquez, Fire-Fee Millionaires Must Return the Money, Miami Herald, Mar. 18, 2006, at A1.

136. Editorial, Florida Bar Should Investigate, Discipline Lawyers, Miami Herald, Mar. 29, 2006, at A24.

137. See Wyeth v. Gottlieb, 930 So. 2d 635 (Fla. App. 3d Dist. 2006).

138. See id. at 640-41.

139. See id. at 640.

140. See id. at 642-43.

141. See id. at 641.

142. Id. at 642 (quoting Rosen v. Ciba-Geigy Corp., 78 F.3d 316, 319 (7th Cir. 1996) (alteration in original)).

143. See Fla. Code Ann. § 766.116 (2003).

144. See Fla. Const. art. 1, § 26 (2004).

145. See H.B. 1019 (Fla. 2005).

146. See Jane Musgrave, State Legislation Sets New Limits, Palm Beach Post, June 13, 2005, at 1B.

147. See id.

148. See H.B. 145 (Fla. 2006).

149. See Alan Gomez, Lawsuit Reform Close to Approval, Palm Beach Post, Mar. 30, 2006, at 16A (reporting that the support of Senators Larcenia Bullard (D-Miami) and Mandy Dawson (D-Fort Lauderdale/Palm Beach County) allowed the legislation to clear is largest hurdle).

150. See Musgrave, supra note 146.

151. See Tort Reform Advocates Will Monitor Impact, Jacksonville Business Journal, Apr. 10, 2006, at http://jacksonville.bizjournals.com/jacksonville/stories/2006/04/10/story8.html.