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2013/2014 Executive Summary

The 2013-2014 report shines its brightest spotlight on six areas of the country that have developed reputations as Judicial Hellholes:

#1 California sits atop the Judicial Hellholes rankings once again, as average Californians feel the pinch of the he-sues-she-sues-everyone-sues litigation climate. The food industry is the latest target of plaintiffs’ lawyers who seek to take advantage of the state’s plaintiff-friendly consumer protection laws and a federal court’s perceived receptivity to such lawsuits. A half-hearted legislative reform did little to stem the tide of disability-access lawsuits, brought by a cadre of professional plaintiffs and profiteering lawyers, which has shuttered small businesses. Asbestos litigation continues to migrate from reform states into California’s permissive courts. And even after other state courts rejected “public nuisance” lawsuits against companies that formerly made lead paint, personal injury lawyers representing 10 local governments still persist with such a claim, pending before a California judge .

#2 Louisiana rockets up the Judicial Hellholes list after the state’s high court gave new life to abusive “legacy lawsuits” that threaten the state’s onshore oil and gas production. A levee board and two parishes, aided by private lawyers, also seek money from energy companies for shoreline restoration projects that are not in line with the state’s Master Plan. Despite its efforts to be a good corporate citizen in the wake of the Deepwater Horizon oil spill, BP is being fleeced by “fictitious” claims. And state Attorney General James “Buddy” Caldwell continues to offer lucrative legal work to his friends and political supporters without open bidding or oversight.

#3 New York City‘s litigation climate grows more costly for taxpayers, consumers, those seeking health care and the unemployed. But the man in charge of the New York State Assembly moonlights for a powerful personal injury law firm and is determined to kill civil justice reform proposals, such as amendments to the state’s antiquated “scaffold law” that drives construction insurance costs through the roof. Meanwhile, the New York City Asbestos Litigation docket, known as NYCAL, is moving in the opposite direction of courts in other states, providing unfair procedural advantages to plaintiffs’ lawyers. The judge overseeing the asbestos docket is currently considering a reintroduction of punitive damages, which would deplete resources available to future claimants and make cases more difficult to settle. And even a Long Island congresswoman has filed a questionable asbestos claim, while state lawmakers/lawyers resist disclosure of their conflicts of interest.

#4 West Virginia‘s sole appellate court expanded liability again this year by imposing a new duty on property owners’ to protect guests from even the most open and obvious of hazards. The move comes after the court allowed a punitive damages award based largely on the amount of the plaintiff ’s attorney’s fees – a move that amounted to punishing the defendant for defending itself in court. The state’s new attorney general has undertaken positive ethics reforms, but a court ruling that expanded the office’s power to hire contingency-fee lawyers could make for more trouble down the road. And Mountain State courts continue to circumvent the workers’ compensation system, issue excessive verdicts, and welcome questionable asbestos litigation.

#5 Madison County, Illinois remains the nation’s epicenter for asbestos litigation, with about one in every four asbestos cases across the U.S. filed there. The county is experiencing a significant uptick in lawsuits by people with lung cancer, which likely was not caused by asbestos exposure. Madison County’s neighbor, ST. CLAIR COUNTY, has not only seen a similar increase in lung cancer cases, but is attracting lawsuits against drug makers. Some of the cases are filed on behalf of groups of dozens of plaintiffs, a technique designed to skirt the “mass action” threshold of the Class Action Fairness Act (CAFA). CAFA made it appropriately easier for defendants to have large, multi-state lawsuits decided in a neutral federal court rather than a Judicial Hellhole .

#6 South Florida may be known for sunny weather, but the outlook is always cloudy for its residents and insurers, who face higher costs thanks to the excessive liability climate. A broken bad-faith law incentivizes plaintiffs’ lawyers to delay or obstruct settlement offers by insurers in order to pursue a large payday by alleging the insurer failed to settle claims in good faith. South Florida’s personal injury attorneys also have developed methods to inflate damages for medical expenses by hiding actual costs or seeking recovery for unnecessary procedures. And perhaps learning from colleagues in California, South Florida plaintiffs’ lawyers are bringing more disability-access lawsuits against small businesses, too.

Watch List

Beyond the Judicial Hellholes, this report calls attention to 10 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. The unusually large number of Watch List jurisdictions relative to full-blown Judicial Hellholes shows progress. As the public and policymakers, learn more about the negative economic effects of poorly balanced civil courts, they are more likely to undertake reforms before their jurisdictions warrant designation among the Judicial Hellholes.

COOK COUNTY, ILLINOIS is viewed as one of the most inhospitable places for a business to face a lawsuit in the country. It could get worse, following a court ruling that lays a welcome mat for product liability lawsuits from around the state, a worrisome development for any company whose goods land on shelves in Illinois. And Chicago itself is routinely targeted by plaintiffs looking for an easy settlement – a culture of lawsuit abuse that has cost the city $192 million since 2012.

THE CITY OF BALTIMORE, MARYLAND teeters on the cusp this year as some gains were made when a trial court denied a powerful plaintiff firm’s attempt to consolidate 13,000 unrelated asbestos cases and the state’s high court resisted several plaintiff lawyers’ attempts to expand liability. But the continuing manipulation of asbestos trust fund claims and lawsuits demonstrate how plaintiffs’ attorneys take advantage of a playing field that remains tilted in their favor.

PHILADELPHIA, PENNSYLVANIA has improved its procedures for mass tort litigation and the state now more fairly allocates damages based on a party’s responsibility for an injury. Cases before the state’s high court, however, could change the way the state handles class actions, product liability, and forum shopping for better or worse. The state legislature’s consideration of proposals that would increase liability and litigation in the state also warrants close monitoring.

NEWPORT NEWS, VIRGINIA stands out among the most plaintiff-friendly jurisdictions for asbestos cases in the country, despite Virginia’s generally conservative tort jurisprudence and recent reforms. The court has set a low bar for scientific reliability of expert testimony, relaxed causation standards, hidden from juries what the plaintiff ’s employer knew about the health hazards of asbestos, and prevented product makers from asserting widely-accepted defenses.

NEW HAMPSHIRE is facing a messy situation, and it is not in the groundwater, but in the legal system. The state’s liability environment is awash with plaintiff-friendly rulings, contingency-fee lawyers, and legislators looking to use a record $236 million verdict as a windfall to fatten state coffers, instead of the environmental cleanup for which it was intended .

CITY OF ST. LOUIS, MISSOURI is becoming a favored location for mass tort cases, with courts permitting lawyers to combine multiple plaintiffs in a single lawsuit . That, along with a recent record-setting punitive damages award and a liability-expanding supreme court, have businesses operating in the region worried .

CLARK COUNTY, NEVADA was declared the “undisputed jackpot justice capital of the world” after its court delivered another $500 million verdict in April, the latest in a string of extraordinary awards stemming from a hepatitis C outbreak. Though the doctor behind the clinic outbreak was criminally sentenced to 18 years to life, civil cases have respectively pinned hundreds of millions of dollars in liability on an innocent drug maker and distributor, and, most recently, a health insurer. The state attorney general’s use of out-of-state contingency-fee lawyers to sue a mortgage lender in Clark County is pending before the Nevada Supreme Court. And the high court adopted a controversial and expansive premises liability standard that could prove costly for businesses in Clark County’s Las Vegas and throughout the state.

JONES COUNTY, MISSISSIPPI is a last bastion for silica lawsuits, which have dried up in other, more reason- able jurisdictions following a federal judge’s fraud investigation in 2005. But in Jones County, where a local judge recently reversed a defense verdict, going to trial is a risky bet for defendants in product-liability cases.

SPARTANBURG, SOUTH CAROLINA is the place of choice for contingency-fee lawyers who use their home field advantage to sue pharmaceutical companies on behalf of the state .

ATLANTIC COUNTY, NEW JERSEY remains still a battleground for pharmaceutical companies who face an uphill slog against a judge they say is biased. New Jersey’s highest court is poised to rule on that question of bias.

Dishonorable Mentions

Dishonorable Mentions, which highlight singularly unsound court decisions, go to the:

  • Oklahoma Supreme Court for nullifying a comprehensive tort reform law passed in 2009, costing the state needless time and money as the legislature was forced to reconvene and re-enact each provision of the law separately;
  • Alabama Supreme Court for being the first and only state supreme court to impose so-called “innovator liability” on a drug company for generic products it did not make or sell;
  • Florida Supreme Court for invalidating an arbitration agreement governing medical care disputes;
  • Illinois appellate courts for expanding workers’ compensation liability beyond its intended scope and providing excessive compensation;
  • Massachusetts Supreme Judicial Court for allowing a trial judge to misuse the state’s consumer protection law to award triple damages against a small business, even though a jury found the business’s owners not respon- sible for the harm;
  • Minnesota Court of Appeals for using the state’s Consumer Fraud Act to create a new private right to sue when the legislature explicitly chose not to authorize such a right; and
  • New Jersey’s Superior Court Appellate Division for ruling that a person who sends distracting text messages to someone who is driving may be liable if there is an accident.

 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. Points of Light are awarded to the:

  • Colorado Supreme Court for instructing trial courts to play an active role in reining in overly broad discovery;
  • Idaho Supreme Court for unanimously standing against “vexatious litigants”;
  • Illinois Supreme Court for striking a blow against the filing of asbestos cases with no connection to the state in its Judicial Hellholes;
  • Maryland Court of Appeals for retaining a longstanding rule that a defendant is not liable when a plaintiff ’s own actions contributed to his or her injury;
  • New Jersey Supreme Court for strengthening the standard for expert testimony in medical liability lawsuits;
  • Colorado Court of Appeals and Oklahoma’s legislature and governor for protecting consumers and their states’ civil justice systems from abusive third-party financing of lawsuits; and
  • U.S. Court of Appeals for the Fifth Circuit for upholding Mississippi’s $1 million limit on noneconomic damages in general personal injury cases .

In addition to these significant court rulings, legislatures in fourteen states enacted significant, positive civil justice reforms, including Alabama, Arizona, Florida, Louisiana, Montana, New Hampshire, New Jersey, Oklahoma, Pennsylvania, Tennessee, Texas, Utah, Virginia and Wisconsin .

Although this report often criticizes state attorneys general, particularly with respect to the hiring of private-sector lawyers to represent their states on a contingency-fee basis, they also deserve recognition for steps they take to improve the civil justice system. Accordingly, this year’s report praises West Virginia Attorney General Patrick Morrisey’s new transparency policy for hiring outside counsel, which provides a stark break from the practices of his predecessor. It also applauds the actions of the AGs of Vermont, Nebraska, and Massachusetts for cracking down on abusive patent litigation.

Special Feature

This year’s report highlights troubling attempts by plaintiffs’ lawyers to circumvent the federal Class Action Fairness Act (CAFA) by keeping massive, multi-state lawsuits in Judicial Hellholes, rather than having them heard in neutral federal courts.