26 December 2012

Venues Insurance Defense Lawyers Hate

Almost every U.S. state determines general jurisdiction trial court venue for civil litigation on a county by county basis.  There are a few more than three thousand counties in the United States.  There are also almost a hundred United States District Courts.  Every state has at least one, but some states have more than one with groups of counties allocated to each judicial district.

Some venues are hated by insurance defense lawyers, and loved by trial lawyers representing plaintiffs, because the laws applicable in that forum, the typical makeup of a jury pool in that forum, and/or the judges in that forum tend to favor plaintiffs over defendants.

An Overview of the Concerns Of Tort Reformers

First and foremost, tort reform advocates dislike class action and mass tort litigation of all kinds, and qui tam suits in which private plaintiff's lawyers are empowered to bring suits on behalf of the general public as a private attorney general in exchange for a contingent fee.

Second, they indiscriminately oppose liability for medical providers for almost any reason, and also believe that damage awards in those cases are too large.

Third, they oppose legal liabilty, in general, for businesses and government for almost any reason, but particularly in strict liability claims of any kind.

They also express concern about judicial and jury bias in liberal jurisdictions and in the case of California, the delays caused by an underfunded judiciary.

A More Neutral Assessment

I am certainly not someone who claims that the unique American system of tort liability focused on the determination of trial juries is perfect.

Class action lawsuits, particularly under the lenient standards of California, can be used to bring large dollar lawsuits for seemingly trivial violations that provide only slight benefit to the victims of improper practices, and have largely failed at the task of causing large numbers of similar claims to be efficiently adjudicated on the merits.  On the other hand, these suits do discourage the routine petty cheating of firms with concentrated interests in breaking the rules from benefitting from their wrongdoing.  Likewise, it is hard to feel much sympathy for qui tam defendants who are determined in a legal process to have violated laws and to owe fines.

Medical malpractice suits are both overinclusive and underinclusive.  Too many suits are brought in which there is a bad outcome but weak evidence of negligence, although low success rates in medical malpractice cases suggest that this strategy isn't very fruitful.  But, the usually blameless people who experience bad outcomes from medical procedures have almost no public or private safety net to address the uninsurable losses that they experience, and far too many cases where there is solid evidence of negligence are never brought or dismissed by a process that often fails to reach the merits of the concerns raised.  The profession is also far too protective of bad doctors who commit a greatly disproportionate share of these claims, and has yet to come to terms with the idea that liability is appropriate for mistakes made by a doctor that are simple mistakes and not just for the kind of gross negligence that a good doctor will never ever make in an entire career.  Another problem with the medical malpractice system is that it fails to acknowledge that medical mistakes are frequently due to having bad systems in place, rather than due to the blameworthiness of a physician in a particular instance that causes harm in the context of weak systems to prevent mistakes.  The claim that medical malpractice liability drives rising health care costs is also bogus.  The notion that large damage awards against genuinely negligent physicians is a big problem is likewise questionable.

Governmental liabilty (raised by the ATRF only in the case of New York City, the largest city in the nation which consolidates functions found in separate governments in most cities, which hence has more incidents that give rise to more suits) presents issues entirely different from those associated with private tort liability.  In general, governments are (arguably unfairly) insulated from liability that comparable private entities would face on lines similar to a tort reformer's utopia.  Civil rights liability, in general, has poor incentives for reforming bad systems and also focuses far too much on the intent of the defendant as opposed to the harm suffered by the plaintiff.  I have long argued for a strict liability takings jurisprudence and vicarious liability, that deemphasizes intentional wrongdoing to people who are harmed in ways that they don't deserve by government action.

The basic problem with the claim that "Judicial Hellholes" are bad for business is that many of them are hubs of big business activity.  Tort liability be damned, the people of Chicago, New York, and California have managed to become global centers of business activity, while defense counsel friendly forums have not.  These supposed anti-business jurisdictions also manage to hold onto the crown jewels of the American economy despite high state and local taxes.  When large commercial banks, commodities traders and tech companies start relocating en masse to the less regulated, lower tax jurisdictions that conservatives claim are business friendly, their arguments will sound much more plausible.

American judges do have vast discretion, as do American juries, and as human beings, sometimes their own personal biases color their judgments in ways that no appeal can remedy.  Judicial elections do a particularly poor job of avoiding the appearance and fact of judicial bias, and starkly political federal judicial appointments have a similar flaw. 

It is also absolutely true that many U.S. states dramatically underfund court resources for civil litigation causing hard to measure, but substantial costs for the private sector economy.

The argument that opportunities for forum shopping should be diminished is a legitimate one, although tort reformers fail to acknowledge that forum shopping by defendants (usually by choice of place of organization or by contractual agreements) can be every bit as egregious.

In my experience, however, tort law is not a particularly problematic part of the American legal system.  Contigent fees provide a good system for screening claims for which legal involvement is merited for quality and seriousness to the average person without taxing the general public.  Casualty insurance provides counsel guided by an employer with an economic interest in a competent defense to accused tortfeasors, provides resources to compensate injured parties, and prevents people unlucky to be careless at the wrong time from being ruined by their unintentional mistakes.  The jury system mitigates the relevance of judicial bias in decision making on the merits in tort cases.  Discovery abuses are not a particularly serious problem in run of the mill negligence cases, which are rarely rich in documents and often have only a few witnesses with personal knowledge of the facts which usually arise out of quite temporally and geographically compact incidents.  It is also relatively hard to shut down a relatively routine negligence case with motion practice, a factor that also controls litigation costs.

The biggest flaws in the civil litigation process between strangers are instead in (1) in business and commercial disputes where motion practice and document discovery costs can grow very large relative to the stakes in the dispute when far less information is legitimately disputed, and (2) in small collection cases where pro se defendants who have legitimate defenses to evictions, foreclosures or contract suits or to specific collection techniques are not equipped to exercise their rights in a meaningful way to limit judgments to the amounts owed and to prevent harm to the defendant far in excess of the amounts not paid.

Tort Reformer's Specific Concerns

The American Tort Reform Foundation, a conservative special interest group that favors narrowing tort liability, calls these places "Judicial Hellholes" and makes an annual list of what it sees as the worst places to be a tort defendant.  This year's 2012-2013 report features two entire states (California and West Virginia), Madison County, Illinois, and the forums that include three U.S. cities: Albany, New York; New York City, New York; and Baltimore, Maryland.  

In California, their main grievances are laws and statutes that favor consumer class action lawsuits and insufficient judical branch budget resources, particularly in Los Angeles.

In West Virginia, concerns are cited about judicial bias against out of state business defendants, limited appellate rights, liberal personal injury liability, and outgoing Attorney General Darrell McGraw, Jr. whose collaborations with plaintiffs' lawyers in ways that the ATRF feels he has used for personal political advancement.  The ATRF similarly expresses lesser concerns about "the state attorney general’s aggressive use of contingent-fee lawyers to enforce state law" in Nevada who are "compensated based on the amount of the fines they impose on businesses," something that is called a qui tam lawsuit in formal legal language.

Madison County, Illinois has been home to many asbestos lawsuits (and other class action lawsuits) and the defense bar feels that local trial lawyers have captured the judiciary through the judicial election system and receive special treatment as a result.  They also state that "the election of a former head of the Illinois plaintiffs’ bar to the appellate bench overseeing its courts provides new reason for concern."

In the two New York State venues, they note large numbers of suits against the city for grounds from civil rights violations to medical malpractice to failure to maintain public works, "a unique state law that imposes liability on those who undertake construction projects, regardless of who is at fault," "more than its share of fraudulent claims," and strong support for trial lawyers in the legislature.

In Baltimore, Maryland, large awards to asbestos claimants and "a case before Maryland’s highest court, in which some plaintiffs’ lawyers – not elected state lawmakers – are seeking to end longstanding legal doctrine that bars recoveries by plaintiffs who are at fault for their own injuries," are cited as concerns.

It also cites lesser concerns.  The ATRF feels much better about Philadelphia, Pennsylvania in the wake a a plan "for mass tort cases handled by the Complex Litigation Center (CLC)" which is under new management. "A new state law now better aligns the liability of defendants with their share of responsibility."  They now urge "legislation that curbs forum shopping in personal injury cases, which allows so many lawsuits to flow to Philadelphia."

South Florida is a reduced concern for them because of "reform of the state’s no-fault auto insurance coverage law, which had led to an alliance between personal injury lawyers and fly-by-night clinics that milk the system and drive up Florida’s insurance rates."  But, they dislike Florida's liability regime for bad faith breaches of insurance contacts, and notes that there are "pending challenge to the state’s limit on noneconomic damages in medical malpractice cases."

The ATRF dislikes Cook County, Illinois (home of the City of Chicago), because "It remains the home of expansive liability and excessive verdicts," and because poorly rated judges have survived judicial retention elections. But, an absence of high profile cases kept it off the top of its lists.

The ATRF praised New Jersey for a "court decision that shields name-brand drug makers from unfair liability in claims involving generic drugs made by competitors, and with what may be a new trend toward fairness in other lawsuits against the state’s key pharmaceutical industry.  But, they claim that medical malpracitce cases are too common and that laywers "make outrageous claims against Little Leaguers, life-saving police officers and girlfriends who send their boyfriends text messages."

The ATRF faults Louisiana for "the state’s litigious environment, aggressive personal injury bar, excessive damage awards, and plaintiff-friendly judges. The state’s uniquely high monetary threshold for obtaining a jury trial ensures that plaintiff-friendly judges serve as juries, too, in many cases."  But, they praise legislative reform of “legacy lawsuits,” which they argue "have unfairly targeted the state’s oil and gas industry, costing thousands of jobs."

1 comment:

Dave Barnes said...

Just pay class action lawyers in the same useless coupons received by the members of the class.
That will end the silliness.