Kentucky Emerges on Judicial Hellholes® Watch List for the First Time

Kentucky Emerges on Judicial Hellholes® Watch List for the First Time

Press Releases | December 5, 2023

Evolution in Legal Landscape and Emerging Challenges Highlighted

In a significant development, Kentucky makes its unfortunate, inaugural appearance on the American Tort Reform Foundation’s Judicial Hellholes® “Watch List.” The “Watch List” includes states and courts that fall right on the cusp — they may drop into Judicial Hellholes® territory or rebalance their legal systems.

ATRF attributes the first-time designation to several concerning rulings out of the state’s courts that will expand liability in the Bluegrass State as well as trial lawyer antics.

First, the Kentucky Court of Appeals established a new tort duty in July, holding employers liable for asbestos take-home exposure and making Kentucky an outlier. The take-home exposure theory of liability has been rejected by several other states.

“This groundbreaking shift in Kentucky’s courts places added responsibility on employers in asbestos-related cases, potentially opening the floodgates to claims spanning several decades,” Tiger Joyce, American Tort Reform Association president said.

Another concern ATRF highlights emerges from a Kentucky trial court’s actions that penalized a business for diligently investigating and reporting suspicious disability claims. The company, CSX Transportation, received an unprecedented number of almost identical injury claims filed by two chiropractors. After investigating and alerting the appropriate parties of the suspected fraud, the company stopped accepting disability claims from the two chiropractors. The chiropractors then sued for defamation. A Greenup Circuit Court jury ruled in favor of the chiropractors, awarding $21.4 million in punitive damages and $1.4 million in compensatory damages.

ATRA submitted an amicus curiae brief supporting the company, expressing concerns about potential implications for businesses reporting suspected fraud. The case is pending in the Kentucky Court of Appeals.

“The Greenup Circuit Court’s jury ruling in this case raises questions about the limits of reporting suspicions of fraudulent claims,” Joyce said. “Businesses should be able to protect themselves and others from the financial burdens caused by fraud without personal motivations being misconstrued.”

Medical malpractice lawsuits in Kentucky are also surging, with some even resulting in the high-dollar “nuclear” verdicts that are common across Judicial Hellholes®. Notable cases include a record-setting $44.5 million award against an oncologist in August as well as a $21.3 million verdict against a clinic in August 2022.

“Kentucky’s alarming rise in medical malpractice lawsuits, coupled with the prevalence of staggering ‘nuclear’ verdicts, pose a direct risk to healthcare providers, insurers, and, most importantly, access to high-quality, affordable healthcare for Kentuckians,” Joyce said. “The resultant increase in medical malpractice liability insurance premiums can force doctors to make difficult decisions, potentially leading them to leave the state due to the financial burden. It’s imperative to recognize the broader impact of rising costs in medical malpractice cases and understand the cost of justice may translate to a loss of healthcare access.”

Medical malpractice filings increased after state courts struck down medical review panels as an unconstitutional barrier to the court system. The review panels were established by the Kentucky legislature in 2017 to evaluate medical malpractice claims before they’re filed, to screen out meritless medical malpractice lawsuits.

Adding to the complexity, ATRF says a trial lawyer’s misleading tactics to circumvent Kentucky’s statute of limitations underscore the state’s challenges in maintaining legal integrity. The lawyer fabricated narratives and submitted false affidavits to keep a case alive.

“Tactics aimed at misleading the court and distorting the truth not only compromise the integrity of legal proceedings but erode the trust in our judicial system,” Joyce said. “Kentucky must address such instances head-on to ensure that justice prevails, and the legal process remains a beacon of truth and fairness for all.”

ATRF says it will closely monitor the Bluegrass State’s civil justice trajectory in the coming year, watching for potential improvements or additional signs of distress that push the state into a full-blown Judicial Hellhole®.

For more information on Kentucky’s legal challenges, visit JudicialHellholes.org.