WASHINGTON (Legal Newsline) - California finds itself at the top of this year's Judicial Hellholes rankings, knocking Philadelphia from the perch.

The American Tort Reform Association released its annual report Thursday, and says "no significant signs of much needed reform can be found in the barely solvent Golden State."

ATRA says California has "preposterous consumer class actions, coercive disability access lawsuits and mounting asbestos litigation" that are driving businesses and jobs to neighboring states. It also said California court budgets are being slashed, resulting in even more backlogged dockets.

"California is the undisputed heavyweight champion of the consumer class action," ATRA says. "Its plaintiff-friendly laws spur ridiculous lawsuits against companies that sell products ranging from breakfast cereal to bagged walnuts."

It says California's small businesses are under siege from "trolling disability-access lawyers and their professional plaintiffs who look for technical rules violations, then demand thousands of dollars to settle."

The group also notes that Los Angeles is seeing a surge of asbestos cases, and it says the state's limit on pain and suffering awards in medical malpractice cases, which has contributed to a stable healthcare environment for many years, is under constant attack.

Behind California in the top five Hellholes are West Virginia; Madison County, Ill.; New York City and Albany, N.Y.; and Baltimore.

ATRA cites lingering troubles with an unbalanced playing field in West Virginia, but notes that the recent defeat of longtime state Attorney General Darrell McGraw shows "voters there oppose the pro-lawsuit status quo."

"West Virginia is feared by business defendants, who feel that some Mountain State judges tip the scales of justice against them," ATRA says. "The lack of a full right to appeal adds to their anxiety. The state's personal injury law remains out-of-the-mainstream, although its high court deserves recognition for some sound rulings."

It says McGraw's defeat could help in the future.

"McGraw was known for partnering with plaintiffs' lawyers to sue businesses on a contingent-fee basis, operating his office as a virtual personal injury law firm, and using settlement money for his own favored causes and self-promotion," ATRA says.

ATRA calls Madison County "the nation's asbestos court," and says this year could see more lawsuits than its record in 2003.

"The county finally decided to abandon its unique and controversial system of assigning trial dates to favored local law firms after it was revealed that the judge who oversaw the asbestos docket received tens of thousands of dollars in campaign contributions from lawyers in those same firms," ATRA says. "The money has since been returned and the asbestos docket is under new management. The election of a former head of the Illinois plaintiffs' bar to the appellate bench overseeing its courts provides new reason for concern."

The group cites an "antiquated" state liability law behind New York City and Albany making the list.

"Each year, New York City faces more than a half-billion dollars in tort liability from lawsuits alleging falls on sidewalks, inadequate care in hospitals, or mistreatment by police," ATRA says. "Businesses also face extraordinary liability, such as through a unique state law that imposes liability on those who undertake construction projects, regardless of who is at fault. The city also hosts more than its share of fraudulent claims, and the solid hold of plaintiffs' bar over the legislature continues to stymie needed reforms."

It says the financial and political capitals of the state have created the reputation of "Sue York."

ATRA says Baltimore is a new site for asbestos litigation after Philadelphia enacted reforms. Before, the group called the city a "home run jurisdiction" for asbestos.

"Since then, asbestos filings have surged, largely driven by tort kingpin Peter Angelos, owner of the Baltimore Orioles," the group says. "Angelos is seeking to consolidate thousands of claims, which, if permitted, would place expediency over fairness.

"Also on the minds of those who face litigation in Baltimore is 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. Such a significant change would disrupt many aspects of Maryland personal injury law, erode personal responsibility, and fuel more lawsuits."

Philadelphia has been moved to ATRA's Watch List this year.

"ATRA is encouraged to know that serious-minded jurists, led by Chief Justice Ronald Castille and Judge John Herron, took our criticisms of Philadelphia as they were constructively intended," ATRA President Tiger Joyce said in a press release about the report. "Their desire to render justice fairly for all parties with matters rightly before Philadelphia courts was the basis for the encouraging reforms we've seen thus far, and the courage and willingness of such judges to challenge the status quo should be an example for all Keystone State policymakers as they redouble broader reform efforts.

"Climbing out of a judicial hellhole and staying there isn't easy. But it has been done by other, ultimately reform-minded jurisdictions, and Philadelphia is working to join them. Assuming trial judges will live up to both the letter and spirit of Judge Herron's reform order, and hopeful that the much-needed capstone of venue reform will soon be added to keep lawsuits out of Pennsylvania jurisdictions where they have no business being heard, ATRA members would like to see Philadelphia stay off the Judicial Hellholes list indefinitely."

ATRA general counsel Victor Schwartz agreed.

"It is a bright spot when courts, such as Philadelphia's Complex Litigation Center, reform themselves and seek to be fair," he said in the release. "A key point about the Judicial Hellholes project is that we simply seek a level playing field for all parties, not plaintiff- or defendant-tilted courts."

South Florida also moved from the Hellholes list to the Watch List because of "targeted legislative actions that have reined in excessive liability."

"The latest achievement is reform of the state's no-fault auto insurance law, which allowed abusive and fraudulent litigation that contributed to rising auto insurance rates," Schwartz said.

Other venues on the Watch List are former Hellholes list members Cook County, Ill.; New Jersey; Nevada; and Louisiana.

Not everything in the ATRA report is bad. It annually lists Points of Light that it says shines on "fair and balanced" judicial decisions.

This year, five state Supreme Courts -- California, Illinois, Kansas, Mississippi, Pennsylvania and Texas are highlighted as well as the New Jersey Superior Court. Also, legislative reforms in Alabama, Arizona, Iowa, Louisiana, Mississippi, Missouri, Ohio, Rhode Island, Tennessee and Wisconsin are noted.

"As anemic economic growth and high unemployment continue to plague much of the country, many governors and state legislators were again determined to make their states more competitive and attractive to employers," Joyce said. "Considering that employers consider litigation environments when deciding where to expand or relocate, it's no surprise that a variety of tort reform measures figured prominently in policymakers' pro-growth, job-creation agendas."

New in this year's report is a list of "worst and best" federal appellate court decisions.

"The innovation is in the criteria for determining whether a federal appellate court decision is sound or unsound," Schwartz said. "Did the appellate court follow the instructions of the U.S. Supreme Court; did the court properly apply the applicable state law; and did a federal court, as is sometimes the case with state courts in Judicial Hellholes, interpret the law expansively in a way that allows abusive litigation?"

The report also includes a section called "Food for Thought: Consumer Protection Lawsuit Abuse on the Rise." It focuses on attacks against food makers such as Kellogg and Nature Valley as well as Taco Bell and McDonald's.

"State consumer laws, which were intended to provide a remedy for lost money in day-to-day purchases, are even being used as an alternative to showing the evidence necessary to recover in lawsuits for wrongful death and claims against drug makers," ATRA says.

The complete report can be found at JudicialHellholes.org.

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