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2014/2015 Executive Summary

The 2014-2015 Judicial Hellholes report shines its brightest spotlight on seven courts or areas of the country that have developed reputations as Judicial Hellholes. Several have become or continue to be hotbeds of asbestos litigation, even though the U.S. has passed its epidemiological peak for mesothelioma, and even as civil courts and lawmakers in much of the rest of the country grow increasingly skeptical of a lawsuit industry that relentlessly generates new claims in Judicial Hellholes and elsewhere. This skepticism is being fueled by mounting evidence of manipulation and even outright fraud.

But asbestos litigation and the jurisdictions that attract a lot of it comprise only a fraction of this year’s report. Permissive courts willing to entertain sometimes preposterous consumer class actions, rogue judges willing to disregard the authority of the other two branches of government, steadily spreading disability-access lawsuits that cynically target small businesses that can’t afford to defend themselves in court, state attorneys general contracting with private-sector personal injury lawyers to pursue their self-interest instead of the public interest, the trial lawyers’ major advertising investment aimed at what they hope will be the next product-liability bonanza, and many other issues all receive attention.

JUDICIAL HELLHOLES

#1 NEW YORK CITY ASBESTOS LITIGATION (NYCAL) has gone from bad to worse over the past year for the many companies that are defendants in asbestos litigation centered there. The manager of the asbestos docket, Judge Sherry Klein Heitler, and other NYCAL judges, often with appellate court blessing, have adopted a series of plaintiff-friendly procedures. Judge Heitler has reintroduced punitive damages in asbestos cases after a near 20-year hiatus and allowed plaintiffs’ lawyers to circumvent a requirement that they file their asbestos bankruptcy trust claims before trial. NYCAL judges also allow plaintiffs’ lawyers to try multiple, dissimilar cases together (consolidation), impose liability on one company for the products of another, and routinely hold defendant’s jointly liable for a plaintiff’s entire damages award despite a New York law that provides for allocation of liability in proportion to fault. As a result of such practices, multimillion-dollar awards in asbestos cases tried in New York City have become commonplace. Statutory reform is not on the horizon, as the Speaker of the New York State Assembly is also on the payroll of one of the law firms profiting from NYCAL imbalance. But the state’s high court has a chance to tug the reins with asbestos appeals pending before it.

#2 CALIFORNIA would have easily three-peated as the #1 Judicial Hellhole had it not been for the acutely shameless bias of New York City’s asbestos court. In fact, it’s impossible in limited space to touch on, much less detail, all that is wrong about the once Golden State’s civil justice system. But this year’s report briefly endeavors to sample several issues, including the troubling use of “public nuisance” law and private-sector contingency-fee lawyers by district attorneys seeking to rifle the deep pockets of corporate defendants, the continuing expansion of asbestos liability and the still relentless targeting of small business owners by so-called disability-access lawsuits. It also examines personal injury lawyers’ exploitation of the health-warning law known as Prop 65 and consumer protection laws, the wholly absurd individual lawsuits encouraged by a permissive judiciary, and even some faintly promising good news from the courts and voters.

#3 The WEST VIRGINIA SUPREME COURT OF APPEALS rarely misses an opportunity to abandon traditional tort law and adopt expansive theories of liability. In the past year alone, it has imposed a duty on home and business owners to protect visitors from open and obvious conditions, required certification of a class action of individuals united by the fact they suffered no injury, and permitted recovery of inflated damages for fictional medical costs. The state’s only appellate court also allowed scientifically unsound expert testimony and rendered a transparently results-oriented decision, written by a plainly conflicted chief justice, which sustained a significant portion of a flawed punitive damages award. Even one of the concurring judges viewed the court’s reasoning in that case as “positively silly.” And one case the high court remanded, due to a trial court’s inadequate analysis, resulted in an even larger award. Meanwhile, the plaintiffs’ lawyer-dominated state legislature in 2014 sought to expand civil liability further, but things could change as voters saw fit on Election Day to install new majorities in the statehouse for 2015.

#4 The FLORIDA SUPREME COURT has played a key role in generating the Sunshine State’s reputation for an unfair civil justice system, which manifests itself most plainly in South Florida. Over the years, the high court has issued a torrent of liability-expanding decisions, many over vigorous dissents. The legislature has overturned several of these decisions, restoring balance, but the high court often has the last word on such reforms. In what may be the most blatant act of judicial nullification in history, the Florida Supreme Court invalidated a law intended to ensure access to healthcare in the state by limiting subjective damages for pain and suffering in medical liability lawsuits. Justices of the high court ignored the wisdom of the legislature and governor, and imposed their own views on the need for and effectiveness of such a damages limit. In the year ahead, the state’s high court is expected to consider whether it will follow or ignore the legislature’s decision to replace Florida’s anything-goes standard for admissibility of expert testimony with the more rigorous standard applied by federal and most state courts.

#5 MADISON COUNTY, ILLINOIS, a jurisdiction that helped inaugurate the Judicial Hellholes report in 2002, is going back to the future. Plaintiffs’ lawyers are fighting to revive a $10.1 billion tobacco verdict reached in 2003 that was thrown out by the state’s supreme court in 2005. They pushed, unsuccessfully, to remove from the high court one of the justices who invalidated that gargantuan verdict, investing over a million dollars to oppose his retention. Meanwhile, Madison County remains the epicenter for asbestos litigation with 9 out of 10 cases filed on behalf of plaintiffs who live and work outside Illinois. The number of asbestos lawsuits filed in the county seemingly leveled off in 2014 after an influx of questionable lung cancer cases in 2013, but filings are still double their 20-year average. Local judges set 50, sometimes over 100, cases for trial on a single day, making it extraordinarily difficult for defense lawyers to prepare.

#6 The MISSOURI SUPREME COURT has developed a reputation for outlier, liability-expanding rulings and for invalidating reasonable civil justice reforms. In 2014 the court found that a law requiring proportionality between a plaintiff’s injury and the punishment imposed on a defendant infringed on the constitutional right to a jury trial. It did so even though federal and state courts have consistently found limits on punitive damages permissible and the U.S. Supreme Court considers proportionality a requirement for due process. Missouri’s high court also altered the standard for a retaliatory discharge claim, exposing state employers to greater liability if they replace an employee who is no longer able to carry out his or her duties after an injury, even after reasonable accommodation. The court’s decisions have sparked a “court reform” movement looking to address the judicial appointments process.

#7 LOUISIANA The shameless feeding frenzy initiated by personal injury lawyers and enabled by a plaintiff-friendly federal judge that began in the wake of 2010’s Deepwater Horizon oil spill continues, seemingly unabated, and other long-standing problems in civil courts there combine to qualify Louisiana as a Judicial Hellhole for another year. But its drop in the rankings from #2 last year to #7 shows that progress is being made — if not so much by the courts themselves than by lawmakers determined to improve the Pelican State’s reputation for civil justice.

WATCH LIST

Beyond the Judicial Hellholes, this report calls attention to six additional jurisdictions that 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.

ATLANTIC COUNTY, NEW JERSEY, known as a center for mass tort litigation, has significantly changed. The state’s Chief Justice promoted to the appellate bench the judge previously at the heart of many of the concerns about the court’s handling of litigation. The New Jersey Supreme Court then spread the bulk of Atlantic County’s mass tort cases, 13,000 pharmaceutical and medical device lawsuits, to other counties. The state is still a center for mass tort litigation, though it is now more dispersed, and a hotbed for consumer class actions.

MISSISSIPPI DELTA Mississippi’s litigation environment has significantly improved since the early 2000s.  Legislative reforms, gubernatorial support, and judicial action led to a remarkable turnaround.  But the 18-county Delta region has resisted the spirit of reform and retains a reputation for favoring plaintiffs.  Trial courts in the state’s northwest are routinely overturned by the Mississippi Supreme Court — and for good reason.

MONTANA warrants close monitoring as plaintiffs’ lawyers have mounted an assault on the state’s statutory limit on punitive damages, which limits punishment to the lesser of $10 million or 3% of a defendant’s net worth. Recent Montana lawsuits resulted in a $10.5 million punitive damages award in a contract suit and a $248 million punitive damages award against an automaker. Although the trial court judge reduced the $248 million award to $73 million, judges in both cases refused to apply the statutory limit. The contract case is pending before the Montana Supreme Court. Additionally, some counties are developing plaintiff-friendly reputations and the state’s governor is blocking reasonable liability reforms.

NEVADA is hosting a $1 billion lawsuit that is trying to shift to a presumably deep-pocketed health insurer the responsibility for a hepatitis C outbreak that was caused by an endoscopy clinic’s criminally unsanitary practices. That billion-dollar verdict follows on the heels of a $524 million Vegas jackpot, for three patients, stemming from the same incident. Meanwhile, the state’s outgoing attorney general, known for hiring private contingency fee lawyers to attack businesses, faced sanctions by a state court judge. Voters chose a new AG who has pledged greater transparency in the hiring of outside counsel and stronger safeguards in how such litigation will be handled. But continuing “construction defect” litigation further hinders the state’s troubled housing sector.

NEWPORT NEWS, VIRGINIA While much of Virginia continues to enjoy a reputation as generally hospitable to business, the same can hardly be said of Newport News, where companies defending asbestos claims brought by local personal injury lawyers can’t get an even break.

PHILADELPHIA, PENNSYLVANIA experienced a substantial decline in mass tort lawsuit filings after the judge supervising the Complex Litigation Center adopted needed procedural reforms and rescinded the court’s invitation for out-of-state claims back in 2012. But plaintiffs’ lawyers still view Philadelphia as a friendly jurisdiction and fight to keep the court from transferring their cases to federal court. Philadelphia continues to host a substantial mass tort docket comprising pharmaceutical, medical device and asbestos cases. Pending retirements of both the judge that instituted the reforms and the state supreme court chief justice who appointed him create uncertainty as to the direction the city’s courts will take in the future.

DISHONORABLE MENTIONS

Dishonorable Mentions, which highlight singularly unsound court decisions, go this year to the Supreme Courts of Alabama and Pennsylvania for recognizing novel product liability theories that most other courts have rejected.

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.

  • U.S. Bankruptcy Court for North Carolina Judge George Hodges exposed rampant manipulation in asbestos litigation in which plaintiffs’ lawyers hide trust claims showing their clients were exposed to asbestos by bankrupt companies while litigating claims against solvent defendants.
  • The Alaska Supreme Court ruled that plaintiffs’ lawyers cannot use the state’s consumer protection law to circumvent requirements for personal injury actions.
  • The Iowa Supreme Court, in contrast to the Alabama Supreme Court, rejected “innovator liability,” which allows plaintiffs to sue companies that developed a brand-name drug when they took the generic version.
  • The Minnesota Supreme Court maintained rational constraints on the state’s consumer fraud and joint and several liability statutes.
  • The New York Court of Appeals did not recognize a cause of action for medical monitoring when a plaintiff has no present physical injury, following the majority approach.
  • The Washington Supreme Court resisted an attempt by plaintiffs’ lawyers to circumvent the state’s worker’s compensation law that would have allowed them to expand the pool of asbestos defendants.
  • Mississippi voters retired a Jones County judge known for imbalanced rulings.

In addition to these significant court rulings, legislatures in a dozen states enacted significant, positive civil justice reforms. Louisiana had a particularly productive session, enacting five laws aimed at improving the state’s polluted litigation environment.

SPECIAL FEATURE

This year’s report also draws attention to a surge in product liability lawsuits against manufacturers of mesh used mostly to treat pelvic floor disorders in older women. Through aggressive advertising, plaintiffs’ lawyers have generated more than 100,000 lawsuits, making mesh the nation’s largest mass tort aside from asbestos. This explosive growth in pelvic mesh litigation not only has public health implications, it is already overwhelming courts and tempting judges to place efficiency over fairness in deciding claims. Since the devices continue to have FDA clearance and some are viewed as the “gold standard” for treatment, the litigation is likely to continue for the foreseeable future.