American Tort Reform Foundation Releases Judicial Hellhole List

 The American Tort Reform Foundation recently published its report identifying the top "judicial Hellholes" for 2015-16.

The top (or bottom?)  jurisdictions are California, NY (asbestos), Florida, Missouri, Madison County, Ill., Louisiana, Hidalgo County, Texas, Newport News, Virginia. and the Eastern District of Texas.

The "watch list" includes West Virginia, Philadelphia (your humble blogger's home base), New Jersey, and Pottawatomie County, Oklahoma.

According to the ATRF, California is the epicenter for lawyers trolling to bring disability access lawsuits against small businesses and ridiculous class action lawsuits against food and beverage companies. Certain areas of the state are also a hotbed for asbestos litigation. Local district attorneys and government agencies have taken it upon themselves to partner with private contingency fee lawyers, leading them to bring novel claims against makers of paint and prescription drugs.

New York City is listed for its ongoing treatment of the asbestos mass tort.

Florida ranks next because, according the ATRF, the Florida Supreme Court issues liability-expanding rulings that are out of sync with courts in the rest of the country. Even when the state legislature, which is heavily influenced by trial lawyers, manages to enact reforms, the state’s high court "nullifies them in favor of boundless liability in the Sunshine State."

Our home base makes the watch list since the Philadelphia Court of Common Pleas hosts one of the largest mass tort dockets in the nation. The court effectively withdrew its open invitation to lawsuits from around the country with the adoption of some procedural reforms in 2012, but the jurisdiction is again experiencing a rise in out-of-state pharmaceutical claims, notes ATRF. Changes on the state high court that could favor plaintiffs, the state’s embattled attorney general’s alliance with private plaintiffs’ lawyers, and a doubling of disability access lawsuits are additional reasons for concern in the Keystone State, says ATRF.

This year's report also includes a discussion of the MDL process, noting the increase in the portion of the federal court docket that is in an MDL.  ATRF states that when the MDL discovery process is concluded, judges often follow a practice of selecting “bellwether” claimants for trial. The selection process can take many forms, including allowing each side to identify cases for trial. In some
instances, however, plaintiffs’ lawyers will simply dismiss the cases chosen by the defendant (or even cases selected by plaintiffs themselves) on the theory that they will be the weakest with respect to success on the merits. The plaintiffs’ lawyers try to select what they perceive to be their “best” cases as bellwethers, rather than representative cases, and when transferee judges have not performed any sort of gatekeeping function, neither the court nor the parties are in a position to know whether the bellwethers are in any way representative of many other claimants in the pool, argues ATRF.

 

Judicial Hellholes Report Released

The American Tort Reform Foundation issued its annual Judicial Hellholes® report this week, naming courts in New York City, California, West Virginia, Florida, Illinois, Missouri and Louisiana among the nation’s most unfair in their handling of civil litigation.

The hard-hitting 2014-15 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 long 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.   But asbestos litigation comprises only a fraction of this year’s report.  Courts willing to entertain preposterous consumer class actions also are highlighted. Also in focus, the dangerous trend of state attorneys general contracting with private-sector personal injury lawyers to pursue their self-interest instead of the public interest.  

New York makes the top of the list for its pro-plaintiff asbestos rules, including allowing plaintiffs’ lawyers to try multiple, dissimilar cases together. California remains on the list for the troubling use of “public nuisance” law and private sector contingency-fee lawyers by district attorneys seeking to "rifle the pockets" of corporate defendants, says the report. The report also examines personal injury lawyers’ exploitation of Prop 65 and California's consumer protection laws.

West Virginia, says the report, rarely misses an opportunity to abandon traditional tort law and adopt expansive theories of liability, and this year 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.  Florida continues its reputation for an unfair civil justice system, according to the report, including through judicial nullification of valid legislative tort reform, such as a law intended to ensure access to healthcare in the state by limiting subjective damages for pain and suffering in medical liability lawsuits.  Missouri makes the report for outlier, liability-expanding rulings and for invalidating reasonable civil justice reforms.  

Of special interest to your humble blogger, hometown Philadelphia is on the "watch list" after seeing some decline in mass tort lawsuit filings but in light of impending retirement of key judges in the mass tort program.

This year’s report again emphasizes the good news from some 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. For example, 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.
 

New Edition of Reference Manual on Scientific Evidence

The National Research Council and Federal Judicial center last week released the new edition of the Reference Manual on Scientific Evidence. Readers of MassTortDefense know   about this manual as a guide for judges searching for effective and fair ways to handle science-based issues, including assessing expert testimony. The Supreme Court has made clear that the law imposes on trial judges the duty, with respect to scientific evidence, to become evidentiary gatekeepers. The judge, without interfering with the jury’s role as trier of fact, must determine
whether purported scientific evidence is “reliable” and will “assist the trier of fact,” thereby keeping from juries testimony that  lacks the same level of intellectual rigor that characterizes the practice of an expert in the relevant field.

The manual is intended to assist judges in managing cases involving complex scientific and technical evidence by describing the basic tenets of key scientific fields from which legal evidence is typically derived and providing examples of cases in which that evidence has been used. As the introduction to the new edition notes, the search is not a search for scientific precision. Courts cannot hope to investigate all the subtleties that characterize good scientific work. A judge is not a scientist, and a courtroom is not a scientific laboratory. But the objective is to seek legal decisions that fall within the boundaries of scientifically sound knowledge.

The Manual includes general chapters such as on "The Admissibility of Expert Testimony" and "How Science Works," and specific chapters on (of interest to our readers) Exposure Science,  Epidemiology, and Toxicology, and new chapters on Neuroscience, and Mental Health Evidence. The authors note the new edition has a focus on two critical topics that judges frequently confront, causation and expert bias.

The new edition was produced by a committee of judges, scientific experts, attorneys and academics. Bu it will be interesting to see if readers, after getting a chance to review it, will find that this version inappropriately undermines the Daubert guidelines enunciated by the Supreme Court and overemphasizes the "discretion" of trial judges to "manage" their dockets despite the meaning of the Federal Rules of Evidence.

 

 

Chevron Suit Proceeds: Ecuador Plaintiffs' Judicial Estoppel Motion Rejected

A New York federal court ruled last week that Chevron could continue to pursue its effort to overturn a questionable $18 billion judgment against the company in Ecuadorean court. Chevron Corp. v. Salazar et al., No. 1:11-cv-0371 (S.D.N.Y. 8/31/11).

This is an action by Chevron for, among other things, a declaration that the large judgment entered against it by a provincial court in Lago Agrio, Ecuador, is not entitled to recognition or enforcement, and for an injunction against its enforcement outside of Ecuador.

The district court's memorandum opinion dealt with their contentions that Chevron was judicially estopped to now deny that (1) the Ecuadorian legal system provides impartial tribunals and procedures compatible with due process of law, and (2) the Ecuadorian court had jurisdiction over Chevron.

The judicial estoppel argument rested principally on statements made in a separate lawsuit brought in 1993 by many of the same plaintiffs against Texaco, Inc. — then an independent, publicly owned company.  That suit was dismissed on the ground of forum non conveniens many years ago and, indeed, before this Lago Agrio litigation even began.  Plaintiffs cited statements made in briefs, and in affidavits and declarations by witnesses submitted in the prior litigation in
support of Texaco's efforts to obtain the forum non conveniens dismissal.  All were allegedly to the effect that the Ecuadorian courts were neither corrupt nor unfair.

Each and every one of these statements was made by Texaco. Indeed, each was made before Chevron acquired its stock in Texaco in October, 2001.  Chevron never was a party to the prior litigation. Thus, the statements about and the alleged consent to jurisdiction in Ecuador were made by Texaco and Texaco alone.

The court thought it important to emphasize that the pleadings in this case were entirely devoid of any allegations that Texaco merged with or into Chevron, or indeed, any subsidiary of Chevron. Nor were there any allegations that would support piercing the corporate veil of Texaco, treating Chevron as Texaco's alter ego, or otherwise disregarding the separate corporate existence of Texaco. Texaco did not merge with or into Chevron. Rather, a wholly owned subsidiary of Chevron
merged with and into Texaco. Texaco was the surviving entity. Chevron became the sole stockholder.

Judicial estoppel occurs when a party assumes a legal position which it later changes, and  assumes a contrary position, especially if it be to the prejudice of the party who has acquiesced in the position previously taken by him. It applies if 1) a party's later position is clearly inconsistent with its earlier position; 2) the party's former position has been adopted in some way by the court in the earlier proceeding; and 3) the party asserting the two positions would derive an unfair
advantage against the party seeking estoppel. Some courts limit it to situations where the risk of inconsistent results has a clear impact on judicial integrity.

Here, the court had a factual and a legal rejection of the application of judicial estoppel.  While Texaco certainly appeared to have argued throughout much of the 1990s that it could get a fair trial in Ecuador, the issue here was different. The issue now was whether the Ecuadorian legal system, in the next decade, provided impartial tribunals and procedures compatible with due process of law. It was Chevron's contention that it did not, as a result of events that occurred in and after 2004, whatever may have been the case previously.  That is not an inconsistent position from what Texaco had allegedly argued.

Second, the operative legal documents in the public record established that Texaco at all relevant times was a legal entity separate and distinct from Chevron. The fact that a Chevron subsidiary merged into Texaco did not make Chevron responsible for Texaco's obligations. To be sure the law recognizes various bases for disregarding a corporate entity and imposing its obligations upon the stockholder or stockholders. But a litigant seeking to impose corporate obligations on a shareholder or shareholders must allege facts that, if proven, would justify disregard of the corporate entity. The plaintiffs alleged no such facts in this case. They certainly had not demonstrated, as they must in order to prevail on a motion for judgment on the pleadings on this theory, that the pleadings unequivocally establish facts that warrant disregarding Texaco's separate corporate existence and imputing its prior statements and positions to Chevron. 

American Tort Reform Association Releases Annual Analysis of Toughest Jurisidictions

The year end brings all manner of lists. The latest ranking of America's "most unfair jurisdictions" in which to be sued has been revealed in the American Tort Reform Foundation's Judicial Hellholes® 2009/2010 report.  South Florida is this year's top “judicial hellhole,” reclaiming a title that it lost in 2008 to West Virginia.  According to the American Tort Reform Association, "Judicial Hellholes" are places where judges systematically apply laws and court procedures in an inequitable manner, generally against defendants in civil lawsuits. In this eighth annual report, ATRF shines the spotlight on six areas of the country that it says have developed unenviable reputations. 

#1 SOUTH FLORIDA
South Florida is listed for its medical malpractice claims, tobacco lawsuits, and large verdicts, according to ATRF. Florida is listed as one of the few states that allow those who drive under the influence of alcohol or drugs to sue the automobile manufacturer for failing to prevent their injuries by designing a safer car, while hiding from the jury the driver's responsibility for the crash.

#2 WEST VIRGINIA
West Virginia is listed due to the state's unique lack of appellate review; elected judges' hostility to out-of-state corporations; unusual trial practices; and the novel, liability-expanding decisions of its high court, according to the Association. 

# 3 COOK COUNTY, ILLINOIS
Cook County is Illinois' center of litigation, hosting 65 percent of the state's lawsuits.  

# 4 ATLANTIC COUNTY, NEW JERSEY

Atlantic County has been identified as a Judicial Hellhole since 2007 in large part because it serves as a center for mass tort actions, often directed at one of the state's own economic generators, pharmaceutical manufacturers, says the Association. Ninety-three percent of plaintiffs in New Jersey's pharmaceutical mass torts come from outside the state.

# 5 NEW MEXICO APPELLATE COURTS
# 6 NEW YORK CITY
 

WATCH LIST
Beyond the Judicial Hellholes, this report calls attention to several additional jurisdictions that ATRF says also bear watching, including California, Alabama, and Jefferson County, Mississippi.

The Report also highlights good news for defendants, including the recommendation of an independent commission established by West Virginia Gov. Manchin that the state establish an intermediate appellate court and provide litigants with a right to an appeal; the Maryland Court of Appeals decision limiting non-economic damages in all civil claims, preventing plaintiffs' lawyers from circumventing the law by characterizing personal-injury lawsuits as consumer protection actions;  Arizona's enactment of medical liability reform;  Oklahoma's passage of a comprehensive tort reform package; and the Texas legislature's resistance to trial lawyer efforts to roll back the substantial progress made in the state in recent years.