Hunton Retail Law Resource

Last month, the American Tort Reform Foundation (“ATRF”) released the 2015-2016 edition of its annual “Judicial Hellholes” report. Each year, the report identifies the venues it deems the least favorable for defendants and highlights notable pro-plaintiff rulings and practices in each jurisdiction. The following jurisdictions are named in the report as the nine worst “Judicial Hellholes”:

• California
• New York City Asbestos Litigation (“NYCAL”)
• Florida
• Missouri
• Madison County, Illinois
• Louisiana
• Hidalgo County, Texas
• Newport News, Virginia
• U.S. District Court for the Eastern District of Texas

Reasons given for the placement of these jurisdictions on the list include excessive verdicts, low causation standards, the influence of plaintiffs’ attorneys over judges and other instances of apparent unfairness towards defendants. The report also includes a “Watch List” of jurisdictions on the cusp of full “Judicial Hellhole” status. West Virginia, Philadelphia, New Jersey and Pottawatomie County, Oklahoma all earned spots on this year’s “Watch List.”

California rose to the top spot on this year’s list after a number of anti-business decisions and verdicts reinforced its reputation as a hostile litigation climate for defendants, including a $1.15 billion damages award against three companies involved in lead paint litigation. The report highlights California’s willingness to entertain a variety of questionable “no injury” food labeling class action lawsuits, including Parent v. MillerCoors LLC, in which the plaintiffs alleged that the labeling on Blue Moon beer “tricks” consumers into believing that the beer is craft beer, as well as two federal lawsuits alleging that the word “handmade” on Tito’s Vodka labels deceives consumers. Florida was also singled out as an unfriendly venue for defendants involved in consumer class actions, including those in which Kashi paid $4 million and Tom’s of Maine paid $4.5 million to settle claims alleging that their products were mislabeled as “natural.”

Asbestos litigation featured prominently in this year’s report. NYCAL, Madison County and Newport News — three jurisdictions home to a vast percentage of all asbestos litigation in the country — all qualified as “Judicial Hellholes.” An empirical study released last year revealed that NYCAL’s practice of consolidating cases for trial results in verdicts that are 250 percent higher per plaintiff than awards in individual NYCAL trials and 315 percent higher per plaintiff than the national average. The report cited docketing practice concerns in Madison County, including its practice of scheduling hundreds of cases for trial on a single day, oftentimes with the result of increased pressure on defendants to settle. That practice, in turn, has had the effect of attracting the plaintiffs’ bar, who, in turn, have been flocking to Madison County to file cases that seemingly bear little to no connection to Madison County or Illinois. In Newport News, plaintiffs enjoy an 85 percent win rate at trial thanks to a uniquely low causation standard.

The report does detail some positive developments in these otherwise problematic venues, as well as other jurisdictions across the country, including encouraging defense rulings, civil reforms and leadership changes.

View the full report.