NYC No. 2 'Judicial Hellhole®' Amid Rampant 'Fraudemic'

New York City Climbs to No. 2 ‘Judicial Hellhole®’ Amid Rampant ‘Fraudemic’

Press Releases | December 10, 2024

Lawsuit Abuse Costs Every New Yorker $2,320 Annually

New York City rose to the No. 2 spot in the 2024-2025 Judicial Hellholes® report and rankings, released today by the American Tort Reform Foundation.

“New York City’s dramatic rise to the top of this year’s Judicial Hellholes® is the result of a civil justice system in crisis,” Tiger Joyce, American Tort Reform Association president said. “The City’s courts are a playground for fraudsters and opportunistic trial lawyers, while honest New Yorkers foot the bill.”

ATRF’s report reveals the stark economic consequences of lawsuit abuse for every New Yorker. Across the state, every resident pays a $2,320 annual “tort tax” – a 15% increase from the previous year. The state also suffers a loss of more than 418,000 jobs annually due to excessive tort costs.

“The city is embroiled in a ‘fraudemic’ with rampant lawsuit abuse, filings that don’t claim any real injury, and groundbreaking suits against social media platforms, all exploiting legal loopholes and driving up costs for everyone,” Joyce said.

“Fraudemic”

The City’s “fraudemic” involves complex fraud schemes targeting various industries, with fraudulent construction site accidents and and commercial vehicle accidents as a main ploy. These schemes involve organized crime rings, unethical lawyers, and corrupt medical providers who exploit legal loopholes to orchestrate elaborate scams.

In some instances, the scammers have gone so far as to encourage individuals to undergo unnecessary, painful and expensive surgeries — all to increase potential insurance payouts.  ATRF notes that the scams often target workers born outside the U.S. with limited English proficiency, leaving them vulnerable to exploitation and sometimes in debt to predatory lenders.

“New York City’s culture of lawsuit abuse spawned this ‘fraudemic’ and it’s gone too far,” Joyce said. “Greedy trial lawyers and their band of fraudsters in this Judicial Hellhole® are taking advantage of and harming hardworking people. It’s time for judges to wake up, stop the madness, and start holding these unscrupulous attorneys responsible rather than letting them walk away without consequence.”

ATRF highlighted several other new issues plaguing New York City’s courts this year, including:

No-Injury Lawsuits: No-injury lawsuits in New York target everything from food labels to website accessibility, which ATRF notes is due to overly broad consumer protection and disability laws in the state. Last year, 25% of all national food and beverage cases were filed in New York, while the state accounted for 33% of all federal lawsuits filed under the Americans with Disabilities Act.

Social Media Litigation: New York courts broke new ground by allowing product liability claims against social media giants, Meta and Google, challenging long-standing legal protections for online platforms. TikTok and Instagram also face wrongful death claims in New York due to a deadly “subway surfing challenge,” that circulated on the apps, potentially opening floodgates for lawsuits blaming digital platforms for real-world harm.

Nuclear Verdicts®: New York ranks second nationally per capita for high-dollar awards in personal injury trials. The median nuclear verdict® in New York is a staggering $20 million, with recent examples including a $287 million product liability verdict and a $72.5 million negligence award. ATRF says these excessive verdicts are driven in part by judges permitting trial lawyer tactics like “anchoring,” in which attorneys request specific dollar amounts for damages.

“It’s not just about rankings – it’s about the real impact on people’s lives,” Joyce said. “Lawsuit abuse stifles potential prosperity and wipes out billions of dollars in economic activity annually. We urge judges, lawmakers, and all New Yorkers to fix this broken system and turn New York City around.”

Further compounding concerns, New York’s state legislature was named a “Lawsuit Inferno” in ATRA’s inaugural “Legislative HeatCheck” report this year due to lawmakers passing liability-expanding legislation rather than commonsense reforms to rein in abuse. Data shows that if lawmakers enacted specific reforms targeting lawsuit abuse, the state could boost its economy by $45.6 billion.

The full Judicial Hellholes® report and 2024-2025 rankings are available at JudicialHellholes.org.