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2018/2019 Executive Summary

The 2018 – 2019 Judicial Hellholes report shines its brightest spotlight on nine jurisdictions, courts or legislatures that have earned reputations as Judicial Hellholes. Some are known for welcoming litigation tourism or as hotbeds for asbestos litigation, and in all of them state leadership seems eager to expand civil liability.

A recent study released by the U.S. Chamber Institute for Legal Reform highlights both the overall cost and inefficiencies of the tort system. The report states that the cost and compensation paid in the U.S. tort system totaled $429 billion in 2016, accounting for 2.3 percent of the U.S. gross domestic product. The 2018-2019 Judicial Hellholes jurisdictions largely contributed to these costs, and on a local level, they saw job loss, personal income loss, and state revenue loss due to the excessive tort costs in the states. The data clearly demonstrate the need for a more balanced civil justice system.

#1 CALIFORNIA A perennial Judicial Hellhole, California has once again regained its position atop the Judicial Hellholes list due to the propensity of California judges and legislators to extend liability at almost every given opportunity. California courts have adopted novel theories of liability and unique California laws and expansive court decisions have fostered abusive “no-injury” litigation. As a result, the state has become a magnet for class actions targeting food and beverage marketing and disability access lawsuits. In addition, a new data privacy law is plaintiffs’ lawyer gold and is expected to lead to extensive lawsuit abuse.

#2 FLORIDA The Florida Supreme Court issued a series of liability-expanding opinions that invalidated civil justice reforms, damaging the state’s civil justice system. The high court once again showed contempt for the lawmaking authority of the state legislature and its decisions will have a lasting impact on the state’s legal climate. The Florida legislature also failed to address blatant lawsuit abuse and fraud, and plaintiffs’ lawyers continued with their usual antics.

#3 NEW YORK CITY While the New York City Asbestos Litigation has been featured in the report since 2013, the 2018-2019 report broadens the “Judicial Hellhole” distinction to include other types of litigation in New York City. Courts in New York City are filled with frivolous consumer class actions and judges permit plaintiff-friendly procedures and high awards in asbestos cases. The state high court also further stacked the deck against defendants in personal injury litigation. Hedge funds are increasingly investing in New York litigation and driving some of the most expensive cases in the state. Additionally, the legislature failed to address excessive construction liability and asbestos litigation abuse, and it expanded medical liability.

#4 THE CITY OF ST. LOUIS, MISSOURI The optimism for a more balanced City of St. Louis expressed in last year’s report quickly evaporated in 2018 as judges were reluctant to end forum shopping and allowed plaintiffs’ lawyers to introduce junk science in the city’s talc litigation. “No-injury” consumer class actions continue to fill the courts and the liability-expanding state high court overlooked juror misconduct in a crucial case against a large in-state employer. Excessive lawsuit advertising has inundated jury pools, making it difficult for defendants to receive a fair trial, and once again, the legislature was unable or unwilling to pass needed legal reforms.

#5 LOUISIANA The state of Louisiana, led by Governor John Bel Edwards, has developed a propensity to hire former campaign donors to represent the state in litigation, creating the appearance of a “pay-to-play” system. There is rampant lawsuit abuse and the legislature has failed to address these problems. The Louisiana Supreme Court also has a propensity to expand liability.

#6 PHILADELPHIA COURT OF COMMON PLEAS Mass tort cases continue to flood the Philadelphia court system due to judges’ loose application of venue laws and an overall lack of legal reform. Philadelphia also remains a hotbed for asbestos litigation. State leadership appears to be strongly aligned with the plaintiffs’ bar, signaling little hope for change.

#7 NEW JERSEY LEGISLATURE In 2018, the New Jersey legislature distinguished itself as the most plaintiff- friendly legislature in the country. While the Judicial Hellholes report typically focuses on the courts, the New Jersey legislature is an exception because of its drastic liability-expanding agenda for the 2018-2019 session. The trial bar also has gained significant power and influence in the state legislature, leading to legislators’ refusal to entertain even the most modest of tort reforms.

#8 ST. CLAIR AND MADISON COUNTIES, ILLINOIS These counties are notorious for their disproportionate volumes of litigation and large verdicts. St. Clair County is a magnet for “no-injury” consumer class action litigation, while Madison County continues to be the plaintiffs’ favorite jurisdiction for asbestos lawsuits. St. Clair also is experiencing a meteoric rise in asbestos litigation, and a lack of legal reform in Illinois allows the litigation to flourish.

#9 TWIN CITIES, MINNESOTA A newcomer to the Judicial Hellholes report, the Twin Cities’ position was solidified after the attorney general mishandled a lawsuit against a large Twin Cities employer and a Hennepin County trial judge stripped a company’s defenses. The lower courts appear to be following the lead of the state’s high court after it subjected property owners to expanded liability in 2018 and rejected a measure intended to remove “junk science” from the state’s courts.

WATCH LIST

Beyond the Judicial Hellholes, this report calls attention to seven 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.

COLORADO SUPREME COURT Liability-expanding decisions and rulemaking by the court coupled with prospects of a pro-plaintiff legislative agenda in 2019 has created an unfair and unbalanced environment for defendants in the Centennial State.

GEORGIA SUPREME COURT Georgia’s Supreme Court in recent years has issued decisions that significantly expanded civil liability, and that troubling trend continued in 2018.

MONTANA SUPREME COURT The Montana Supreme Court’s penchant for expanding liability, judicial activism, and defiance of U.S. Supreme Court precedent once again landed it on the Judicial Hellholes Watch List.

NEWPORT NEWS, VIRGINIA Perhaps most notable in 2018 is the lack of cases to go to trial in Newport News. Plaintiffs and defendants alike have sought to litigate asbestos cases in federal court, as a result, it is hard to know whether problems and inequities that have manifested themselves in the past will persist. Newport News has been known for its evidentiary double standards, unsound legal rulings and lack of transparency in asbestos litigation.

OHIO EIGHTH DISTRICT COURT OF APPEALS–CUYAHOGA COUNTY A newcomer to the Watch List, the district has developed a reputation for handing down large damage awards and being a “haven” for class action lawsuits. It has developed a troublesome pattern of issuing unbalanced plaintiff-friendly decisions, which had to be overturned multiple times by the Ohio Supreme Court.

PENNSYLVANIA SUPREME COURT The high court issued a series of liability expanding decisions and has been selective, at best, in following U.S. Supreme Court precedent, inexplicably opening its doors to out-of-state plaintiffs.

WEST VIRGINIA SUPREME COURT OF APPEALS In an unprecedented move, West Virginia lawmakers voted to recommend the impeachment of all sitting members of the state’s highest court in 2018. Prior to the impeachment chaos, the court also issued a disappointing class certification decision that rejects U.S. Supreme Court precedent and encourages plaintiffs’ lawyers from all over the country to flock to West Virginia courts to file class action lawsuits. The 2018 elections did bring about some encouraging news with the election of U.S Representative Evan Jenkins and former House of Delegates Speaker Tim Armstead to fill the vacancies on the court.

DISHONORABLE MENTIONS

Dishonorable Mentions comprise singularly unsound court decisions, abusive practices, legislation or other actions that erode the fairness of a state’s civil justice system and aren’t otherwise detailed in other sections of the report.

Included among this year’s list is the American Law Institute’s adoption of a troublesome Restatement on Liability Insurance, Cook County, Illinois’ BIPA litigation, disappointing asbestos decisions in Delaware and Maryland, and the judicial nullification of liability limits in New Mexico and North Dakota. The Massachusetts high court also adopted ‘innovator liability’ and two Texas trial courts handed down massive judgments, one of which was the nation’s largest in 2018.

POINTS OF LIGHT

This year’s report again enthusiastically emphasizes the good news from some of the Judicial Hellholes states and other jurisdictions across the country. Points of Light are examples of fair and balanced judicial decisions adhering to the rule of law, positive legislative reforms and other encouraging developments.

One very encouraging development this year was the New Jersey Supreme Court’s series of well-balanced decisions. A perennial Judicial Hellhole, the court took very important steps in helping to restore fairness in the state’s legal system.

Among the other positive decisions, the U.S. Supreme Court enforced a class action waiver in arbitration agreements, and the Fifth Circuit overturned a $502 million verdict against Johnson & Johnson after finding “unequivocally deceptive” conduct by the plaintiffs’ lawyer. The Wisconsin Supreme Court also upheld the statutory limit on noneconomic damages in medical liability cases.

Meanwhile, legislatures in eight states enacted nine civil justice reform statutes in 2018, including asbestos trust transparency legislation in Kansas, Michigan, and North Carolina; transparency in private attorney contracting legislation in Kentucky and Missouri; and finally, an important e-Discovery and class action reform bill in Wisconsin.

CLOSER LOOKS

‘JUNK SCIENCE’ MAKING ITS WAY INTO AMERICAN COURTROOMS Despite the U.S Supreme Court bestowing upon judges the responsibility of serving as “gatekeepers” to weed out junk science and prevent it from being offered to jurors in their courtrooms, many judges have either refused to accept this role or have fallen short in their efforts to do so. There is a growing trend of judges and juries relying on unsubstantiated “science” as the basis of massive judgments against corporate defendants. Reasonable rules and procedures are essential to a balanced civil justice system, and it is up to the judiciary and lawmakers to ensure that junk science does not find its way into courtrooms.

FIGHTING ‘NO-INJURY’ LAWSUITS In recent years, plaintiffs’ lawyers are chipping away at the core requirement of a plaintiff experiencing an injury in order to file a lawsuit, bringing claims based purely on speculation, risks of future harm, and creative theories of financial loss. The injury requirement is a critical safeguard for the civil justice system and must be restored.

ACTIVIST STATE ATTORNEYS GENERAL LOOKING TO REGULATE THROUGH LITIGATION State attorneys general are seizing the opportunity to use current “hot-button” issues, like the opioid crisis and climate change, to propel forward their personal careers and generate campaign dollars for future political aspirations. Lawsuits brought by powerful state governments must serve the public interest, and not merely the profit-seeking interests of politically influential members of the plaintiffs’ bar.

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