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Philadelphia, Pennsylvania

Reforms instituted early in 2012 by Administrative Judge John W. Herron of the Philadelphia Court of Common Pleas have improved court procedures for addressing mass torts, keeping Pennsylvania off the Judicial Hellholes list for another year. Last year, regular readers of this report will recall, Philadelphia moved from ranking as the #1 Judicial Hellhole, where it had reigned for two consecutive years, to the Watch List. But the jurisdiction still bears watching, given its history as a litigation magnet, three pending Pennsylvania Supreme Court cases and legislative proposals that could significantly increase litigation in Philadelphia and throughout the Keystone State.

DEMAGNETIZING THE MASS TORT DOCKET

Shortly after the release of last year’s Judicial Hellhole report, Judge Herron issued a year-end report showing the remarkable progress following the first overhaul of practices at the Complex Litigation Center (CLC) in many years. There were 70% fewer mass tort filings in 2012 than in 2011, representing a return to pre-2009 filing levels. Out-of-state filings declined slightly, but many Philadelphia cases still involve plaintiffs from outside Pennsylvania. The share of pharmaceutical cases filed by out-of-state plaintiffs fell from 88% to 86%, and in asbestos cases it fell from 47% to 44%. The overall inventory of mass tort cases pending before the CLC declined by about 14% in 2012 after more than doubling over the pre- ceding six years.

These changes are a result of the CLC’s adoption of General Court Regulation No. 2012-01, which revised and streamlined procedures governing mass tort litigation in Philadelphia. The order responded to a dramatic increase in filings after the court’s leadership had invited claims from other jurisdictions. Judge Herron’s order ended reverse bifurcation (deciding damages before liability) in all mass tort cases, limited consolidation of non-asbestos cases, and continued to require deferral of all punitive damages claims in asbestos litigation, among other reforms.

Judge Herron hailed the changes as an “exceptional result” leading to a much more manageable docket for the court and a “remarkable turnaround.” Defense attorneys recognize that today “Philadelphia is not as attractive to out-of-state firms and forum-shopping plaintiffs.” Instead, more of these mass tort cases are being filed in federal courts or in neighboring New Jersey, according to product liability experts.

FAIR ALLOCATION OF DAMAGES IN ACCORDANCE WITH RESPONSIBILITY

In addition to judicial reforms, enactment of the Fair Share Act by the legislature two years ago also has helped improve Philadelphia’s litigation environment. Pennsylvania was one of a handful of states that imposed full joint and several liability, meaning that a defendant who contributed in any way to a plaintiff ’s harm could be unfairly required to pay all of the plaintiff ’s damages. The Fair Share Act holds defendants accountable for their proportional share of the damages relative to their responsibility for the injury, and it only holds defendants fully liable if they are 60% or more at fault (or in other limited circumstances).

The law is beginning to have an impact. In the past, personal injury lawyers would often file lawsuits against businesses with the deepest pockets, regardless of the businesses’ level of responsibility. Now, some plaintiffs’ attorneys observe, they are less likely to file lawsuits against businesses that allegedly played a minor part in what happened to their client. Defense lawyers in Philadelphia have found that taking joint and several liability off the table has allowed defendants “to garner more fair settlements that are more in line with the facts of the case.”

IMPORTANT CASES PENDING BEFORE THE PENNSYLVANIA SUPREME COURT

Three cases pending before the state’s highest court warrant close monitoring because they could impact the litigation environment in the state, especially Philadelphia.

  • Product liability. The high court has an opportunity to move away from its unique strict products liability jurisprudence that has become unworkable and replace it with a modern, mainstream approach in Tincher v. Omega Flex, Inc. in 1966 Pennsylvania adopted a “strict liability” standard for deciding product liability lawsuits that is primarily focused on mis-manufactured products, such as broken glass in a bottle. In subsequent years, Pennsylvania courts struggled to apply strict liability concepts to design-defect and failure-to-warn claims. The state’s high court is considering whether to replace this approach, with a more modern approach that includes consideration of alternatives available to the defendant.
  • Forum shopping. The Pennsylvania Supreme Court is reviewing an appellate court’s reversal of a Court of Common Pleas of Philadelphia County order that would have transferred a case to Dauphine County. In that case, all of the defendants were from Dauphine, all witnesses were from Dauphine, and none of the Plaintiffs were from Philadelphia. Dauphine County is 105 miles from Philadelphia. At issue in Bratic v. Rubendall is the proper standard for deciding motions for forum non conveniens in Pennsylvania, which allows a court to transfer or dismiss a case upon a showing that the current venue is “oppressive or vexatious” to the defendant. The upcoming decision is expected to clarify the factors courts may consider when deciding to transfer a case. It is likely to impact the ability of plaintiffs’ lawyers to forum shop in Pennsylvania and seek favorable treatment in Philadelphia when their cases would be more appropriately heard elsewhere.
  • Class action standards. How Pennsylvania deals with so-called “trial-by-formula” class action cases will be up for debate before the high court as justices hear an appeal of two consolidated wage-and-hour cases that resulted in a $187 million judgment against Wal-Mart in Philadelphia County. The case involves a class of workers who allege they were forced to work off the clock. Based on the testimony and time-clock evidence of just six workers, the Court allowed the plaintiffs’ experts to apply a formula to determine damages for approximately 187,000 current and former Wal-Mart employees. As one firm observed, the case “illustrates the significantly different and more liberal standard Pennsylvania courts are applying to this Commonwealth’s class certification rules than the rigorous analysis and proof necessary to obtain class certification under the federal class certification rules.”

LIABILITY-EXPANDING LEGISLATION

The Pennsylvania General Assembly is considering several proposals that would increase litigation. One such bill would have Pennsylvania adopt its own expansive False Claims Act. The federal False Claims Act and similar state laws have led to an explosion of litigation by individuals claiming that a business engaged in inappropriate practices in a contract with the government and that, as a “whistleblower,” they should receive a substantial portion of any taxpayer recovery. Another bill would raise the limit on the liability of political subdivisions, such as cities and counties, from $500,000 to $2 million. The bill would undermine a Pennsylvania appellate court ruling finding the $500,000 limit constitutional, though the sponsor says there is no connection to the court case. That case is now pending before the Pennsylvania Supreme Court. A third bill would provide Pennsylvania’s Attorney General with extraordinary new powers to enforce antitrust laws.

LACK OF BROTHERLY LOVE AMONG LAWYERS

Speaking of antitrust laws, there is a fight underway in federal court between two personal injury law firms who are battling for clients in Philadelphia. Philadelphia-based Larry Pitt & Associates PC alleges a rival firm, Lundy Law LLP, violated federal antitrust laws by negotiating exclusive deals to advertise its services on buses operated by regional transit authorities. The contracts prevent the Pitt law firm and others from advertising through those outlets. According to the plaintiff-plaintiffs’ firm, Lundy Law has engaged in predatory conduct and is attempting to monopolize personal injury, Social Security disability and workers’ compensation law in the area. Clearly, competition among personal injury lawyers remains fierce for Philadelphia’s lucrative lawsuit business.

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