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Work of AGs, supreme courts explored in 'hellhole' report

By John O'Brien | Dec 14, 2010


WASHINGTON (Legal Newsline) - As usual, state attorneys general and state supreme courts received a share of the attention in the American Tort Reform Association's annual Judicial Hellholes report.

Moves by state supreme courts in West Virginia, Michigan, Colorado and Illinois were viewed in a negative light by ATRA in its report, released Tuesday. Florida Attorney General Bill McCollum and the Maryland Court of Appeals, however, are given positive marks.

McCollum was central in legislation passed in Florida this year that caps the amount of money private attorneys can make while representing a state agency.

"The law will help avoid 'pay-to-play' situations that have plagued a number of states, wherein elected officials coincidentally offer cushy contingency contracts to some of their biggest campaign contributors," ATRA wrote.

"Florida Governor-elect Rick Scott's pledge to work for a more fair and predictable civil justice system as a key initiative during his administration bodes well for the future."

The legislation provides more readily available public information about contingency fee contracts, such as timesheets and firms' bids. Sen. John Thrasher and Rep. Eric Eisnaugle sponsored the legislation.

A similar measure passed earlier this year for contracts given by the State Board of Administration to private firms for securities lawsuits.

In Maryland, the Court of Appeals -- the state's highest court -- was smiled upon by ATRA for upholding a state law that limits noneconomic, or pain and suffering, damages. The limit increases with inflation and currently sits at $720,000.

The supreme courts of Illinois and Georgia did the opposite this year, striking down limits on such damages.

"The reasonableness shown by jurists in the relatively low-unemployment state of Maryland stands in stark contrast to those sitting on state supreme courts in two high-unemployment states: Illinois (home to perennial Judicial Hellholes) and Georgia," the report says.

"Justices on both courts this year struck down statutory limits on awards for pain and suffering, bucking a trend among other state courts and replacing the policy judgments of elected legislators and governors with their own."

A similar challenge will be decided by West Virginia's supreme court in 2011, and if the cap is struck down it will only further increase the state's longstanding reputation as a judicial hellhole, ATRA says.

West Virginia has been placed on the list regularly since 2002, and this year it is criticized for not going further in creating an intermediate court of appeals.

Then-Gov. Joe Manchin's pledge to create one was listed as a "Point of Light" last year, but state Supreme Court Chief Justice Robin Davis has resisted such change, the report says.

"She argued through an open letter that litigants in West Virginia already have a right of appeal - they can petition the court to review the case," the report says.

"When the state's business community and others took issue with her remarks, noting that asking the court to hear a case and having a court actually decide a case on the merits are hardly the same thing, the court proposed changes to its appellate rules."

Michigan, too, saw changes on its highest court, but it was in the makeup. Liberal justices had a brief period as the majority this year, and ATRA said they used the time to expand liability.

ATRA said the court "abandoned established principles in medical malpractice cases" and overturned a previous decision that allowed noneconomic damages in car wreck cases when the plaintiff suffered major impairment of a bodily function.

A recent decision by the Colorado Supreme Court, ATRA adds, will allow for over-recovery. The court ruled plaintiffs may collect costs of medical care that were billed but never actually paid.

"This over-compensation is often substantial," ATRA wrote. "For example, the Colorado case involved a typical slip-and-fall that occurred at an event sponsored by the nonprofit Volunteers of America, for which the plaintiff was found 49 percent at fault.

"The amount paid by the plaintiff's insurer for his medical expenses came to $43,236, while the amount billed before application of the negotiated rate was $74,242.

"As this example shows, inclusion of such illusory costs can easily increase awards for damages in personal injury suits by 40 percent."

The lawsuit of Louisiana Attorney General Buddy Caldwell against Janssen Pharmaceutica is listed as a reason why St. Landry Parish received a dishonorable mention.

A jury awarded the State $258 million in the case, brought by private attorneys over the drug Risperdal. The federal Food and Drug Administration had found the company understated side effects like weight gain and overstated the drug's effectiveness.

The jury fined the company for every letter and phone call it sent to doctors. The FDA had only required a corrective letter sent to the doctors. The same allegations resulted in only a $4.5 million verdict in West Virginia, and it was overturned on appeal.

Finally, ATRA worries that New York attorney general-elect Eric Schneiderman does not progress what they feel is the agenda of Assembly Speaker Sheldon Silver. ATRA says Silver has killed tort reform bills while pursuing a liability-expanding agenda.

It also says he has a financial stake in a company that finances litigation.

"One of Speaker Silver's key legislative allies in threatening the financial industry with expansion of the state's Martin Act, former state Sen. Eric Schneiderman, was just elected to become the state's next attorney general," it wrote.

"So, unless the outgoing attorney general and incoming governor, Andrew Cuomo, lives up to his campaign stance as a budget-balancing moderate amenable to reasonable tort reforms, look for lawsuit-loving Albany to drag the rest of New York down with other judicial hellholes."

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