Nine Hellholes You Want to Avoid
from
July/August 2005
by Sasha Issenberg
When President George W. Bush kicked off a campaign-style tour to promote tort reform, he went first to Collinsville, a horseradish-producing burg in Madison County, southern Illinois. “A recent study ranked Madison County the No. 1 place in the country for trial lawyers to sue,” Bush told the crowd. “And that’s a ranking I’m sure you’d like to get rid of.” No one in the friendly audience had to wonder which study Bush had cited; the term “judicial hellhole” was well known in Madison County.
By not using that term, perhaps the president was merely respecting the authorial privilege of a fellow nicknamer. The title of top judicial hellhole—a place where the deck is stacked in favor of plaintiffs—was awarded to Madison County by Victor Schwartz, a lawyer with the Washington, D.C., office of the Kansas City firm Shook Hardy & Bacon. He invented the ranking, designed its methodology, and trademarked its name, making himself the Dante of a judicial netherworld. As a director, you don’t ever want your company brought to trial in one of his circles of hell.
For the last three years, Schwartz has helped assemble the Judicial Hellholes™ list at the behest of the American Tort Reform Association, a Washington-based group he serves as general counsel. ATRA’s membership is polled to find out which jurisdictions gave plaintiffs the most consistent advantage during the year. The subsequent list serves as a tour guide to what the reform group determines are the country’s least just courts, a sort of Let’s Not Go! for any company that might find itself on the wrong end of a lawsuit. The latest list, released in December, names nine hellholes.
In Edwardsville, the seat of top-ranked Madison County, the courthouse is a busy place. That’s because of liberal venue rules that put little restriction on who is eligible to sue in the county’s courts, and on regulations that limit the evidence defendants can present. In just one week right before the Schwartz report was released last December, the list of corporate defendants in Madison County courtrooms resembled a blue-ribbon slice of global industry: American Standard, Bridgestone, Champion International, Ford, General Dynamics, General Motors, Georgia-Pacific, Honeywell, Ingersoll-Rand, Kimberly-Clark, Kmart, Mead Corp., MetLife, Pfizer, Roto-Rooter, Scott Paper, Sears Roebuck & Co., Union Carbide, Union Pacific, Uniroyal, and Viacom.
Second place went to a close neighbor. According to the report, “the abusive and unfair practices endemic to Madison County have infected neighboring St. Clair County, where the number of class-action lawsuits filed in the past two years has increased by an astounding 1,100%.” Both Madison and St. Clair counties are also havens for medical malpractice suits, which resulted, according to the ATRA report, in the departure of 161 of 975 licensed physicians from the area last year.
Hellhole No. 3 is Hampton County, South Carolina, where the number of suits, most of them brought by residents of other counties and states, has almost doubled in the past five years. The entire state of West Virginia, Hellhole No. 4, is cited for “taking employment protection to a whole new (and dangerous) level.” It is specifically criticized for “a state Supreme Court ruling that a safety director fired for on-the-job cocaine use could not be terminated, even though the employee lied about his cocaine use and ‘dishonesty’ was grounds for dismissal within the employee’s contract.”
Jefferson County, Texas, is ranked fifth because of a $1 billion award to a single family that claimed injury from the fen-phen diet-pill combination. During the trial, according to ATRA, “the judge refused to admit critical evidence that the defendant might not have been responsible for the plaintiff’s harm.” Louisiana’s Orleans Parish, South Florida, Philadelphia, and Los Angeles complete the list, in that order.
“The list is not there to help defendants who lose cases because they deserved to lose them, or because an award is a little higher than it should be,” says Schwartz. “It’s about bad places where you know the outcome of the case almost before you enter the courtroom.” In these jurisdictions, he says, “any reasonable person would say that fundamental rules are not being followed; the words above the Supreme Court—‘Equal justice under the law’—aren’t followed against unpopular defendants. I’m not criticizing jury-trial awards. We’re talking about the rulings of judges. If you have an okay jury but you put bad science in front of it or you rush somebody to trial before they’re ready, you regularly get bad results. I think most of it is the judgment of the judges.”
Tort king Dickie Scruggs, who was a lead lawyer in anti-tobacco suits and is now taking on HMOs, has said, “What I call the ‘magic jurisdiction’ . . . [is] where the judiciary is elected with verdict money. The trial lawyers have established relationships with the judges that are elected; they’re state-court judges; they’re populists. They’ve got large populations of voters who are in on the deal; they’re getting their [piece] in many cases. And so it’s a political force in their jurisdiction, and it’s almost impossible to get a fair trial if you’re a defendant in some of these places. These cases are not won in the courtroom. They’re won on the back roads long before the case goes to trial. Any lawyer fresh out of law school can walk in there and win the case, so it doesn’t matter what the evidence or law is.”
Says Schwartz: “What is my hellhole is his magic jurisdiction.”
Directors or officers of companies can’t do much to immediately protect themselves in these jurisdictions, Schwartz says. They can, he naturally adds, support ATRA’s policy efforts. “If I’m the CEO of a corporation and I start decrying a bad verdict, I’ll have people who will think I’m a sore loser,” he says. “If it’s people from ATRA who say this is a judicial hellhole, that will prevent a company itself from being accused of sour grapes or being subjected to vengeance if it gets caught there again.”
Among ATRA’s priorities is the reform of venue rules that allow plaintiffs to take on a corporation in any jurisdiction where the company does business—basically giving them the option of going anywhere. The venue reform would allow you to sue only where you live, where you were hurt, where you work, or where the defendant’s principal place of business is located. ATRA has been pushing federal legislation to limit venue-shopping, and President Bush recently signed one of its sought-after laws, which moves many class-action suits from state courts into federal courts.
Schwartz hopes that his Judicial Hellholes list will help kill the industry he calls litigation tourism. “Litigation tourists go places where they don’t live, where they weren’t hurt,” he says. “They don’t go to the beach or to the casino—unless you consider the courtroom a casino.”
ATRA is pleased that reforms pulled Mississippi’s 22nd Judicial District off the list this year and that owing to crackdowns in most of Texas, only one jurisdiction in the state was a hellhole in 2004, down from three in 2003. But Schwartz gets reports of venues that are becoming increasingly plaintiff-friendly—at the moment he’s hearing a lot about eastern Kentucky and Oklahoma—and are possible candidates for the next list. Which is why he is sure that the list won’t go away unless federal legislation banning all venue-shopping is passed. “One place closes down,” he says, “and another place opens up.”
