WASHINGTON – West Virginia was branded the nation's worst Judicial Hellhole on Wednesday by the American Tort Reform Foundation.
In its fifth annual Judicial Hellhole report, the foundation says West Virginia courts have "served as the home field for plaintiffs' attorneys determined to bring corporations to their knees."
West Virginia was ranked third in last year's survey.
The ATRF report also mentions a few specific high-profile cases – including a court venue case that earlier this week was rejected by the U.S. Supreme Court – and a few West Virginians, including Attorney General Darrell McGraw.
West Virginia was followed on the list by South Florida, the Rio Grande Valley and Gulf Coast in Texas and three Illinois counties: Cook, Madison and St. Clair.
The report says West Virginia simply slid backward in terms of venue reform.
A 2003 reform law intended to curb the forum shopping barred suits in West Virginia courts by those who do not live in West Virginia unless a "substantial part" of the acts or omissions giving rise to the claim occurred in the state or the plaintiff was unable to sue in another state. The state Legislature also required that plaintiffs satisfy the new venue requirements so as to prevent out-of-state plaintiffs from riding on the coattails of a plaintiff for whom venue is proper.
"In Morris v. Crown Equipment Corp., the law was applied to tell a plaintiff from Virginia, whose workplace injury occurred in Virginia on a forklift that was sold and used in Virginia while all witnesses and evidence were presumably in Virginia, too, that he could not sue the Ohio manufacturer in West Virginia simply because the distributor, a codefendant, was incorporated there," the report says. "Do not pass go; go back to Virginia.
"But the West Virginia Supreme Court of Appeals invalidated the 2003 law on June 29, 2006, saying that it discriminated against out-of-state residents under the Privileges and Immunities Clause of the United States Constitution."
Victor Schwartz, general counsel for the American Tort Reform Association, said that is part of the reason the Mountain State is at the top of this year's Hellhole list.
"One of the reasons West Virginia is No. 1 is that reform came about," Schwartz said Wednesday during a press conference in Washington, D.C. "Lawyers call it venue reform. If you weren't injured in the state, you couldn't sue in the state. It was a very rational, reasonable law.
"But the West Virginia Supreme Court held the law unconstitutional. It was very unfortunate because to get that reform took a lot of time and sweat equity to get. But that action strengthened the magnet for West Virginia. We like to pinpoint particular counties, not an entire state. But the highest court of West Virginia showed, in part, why we're talking about the entire state."
The report says that decision "conflicts with prior decisions by the United States Supreme Court which allowed states to favor residents over nonresidents in providing access to their courts. Other courts have upheld such rational anti-forum shopping measures, protecting the tax dollars and judicial resources of one state from citizens of other states. …
"The state's highest court thwarted that progress and made it likely that the flood of lawsuits with no real connection to West Virginia will rise again. A divided court held the state's venue statute to be unconstitutional under a highly questionable interpretation of the Privileges and Immunities Clause in Article II of the Constitution of the United States."
And that means the doors to West Virginia courts have been reopened, ATRF says.
"Nonresident plaintiffs will be allowed to bring product liability and other mass litigation suits in West Virginia without any showing of acts or omissions in the state, so long as each plaintiff can allege a colorable claim against one West Virginia defendant," the report states. "As a result of the West Virginia Supreme Court of Appeals striking down the law, local courts could again become overrun with mass tort cases."
ATRF says "Judicial Hellholes are places where judges systematically apply laws and court procedures in an unfair and unbalanced manner, generally against defendants in civil lawsuits."
ATRF says West Virginia, which has been named in every Judicial Hellhole report, "is known for its cozy relations between plaintiffs' lawyers, judges and the attorney general."
In the report, ATRF says the jurisdictions discussed frequently are identified by ATRA members and other individuals familiar with litigation. The report considers only civil cases.
The report says "West Virginia continues to grow its reputation for lawsuit-happy lawyers, plaintiff-friendly judges, and questionable and potentially fraudulent claims."
"It is a place where plaintiffs' attorneys sometimes seek more in fees than their clients receive in recovery, and where personal injury lawyers sue each other and their own prior clients over litigation expenses."
The report also says plaintiffs' lawyers "love West Virginia because there they can pick-and-choose the courts in which they file claims, and because a legal rule allows plaintiffs with no signs of injury to collect cash merely by showing they were exposed to a potentially dangerous substance.
"In addition, there seems to be no reasonable limit on damages in the Mountain State, and a defendant that is only partly responsible for an injury can be forced to pay 100 percent of a damages award."
The report also notes the long history of "alliances and close personal connections between personal injury lawyers, the state's attorney general, Darrell V. McGraw Jr. and state judges." It mentions the practice of McGraw's office using campaign contributors as Special Assistant Attorneys General, and it mentions the lawsuit McGraw's brother Warren, a former Supreme Court justice, filed earlier this year blaming a car accident for his losing a bid for re-election in 2004.
"A bit far fetched, but this is West Virginia," the report says.
The report also touches on how state courts handle asbestos cases, allowing them "to group together thousands of individual claims. This both put enormous pressure on defendants to settle, and severely limits the ability of courts and defendants to focus on the merits of individual claims. Many of these claims are also brought by people who do not reside in West Virginia."
ATRF says some reports have estimated that excessive litigation costs West Virginia's economy as much as $626.3 million annually, a permanent loss of over 16,000 jobs, and about $1,500 per family per year through higher inflation, lost income and decreased spending.
The report also mentions a case that alleges plaintiffs' lawyers and "their hired-hand doctors" drummed up fraudulent evidence in asbestos and silica claims.
"For instance, this year, defense attorneys for CSX Transportation discovered that a doctor who signed medical reports supporting an asbestos claim of a former railroad worker does not exist. CSX found that a supposed office address for "Dr. Oscar Frye" at 1507 Fifth Avenue in Huntington, West Virginia, has been nothing more than a vacant lot for the past 50 years," the report says. "The Board of Medicine, state Board of Chiropractic, and Board of Osteopathy had no record of any license issued to a Dr. Frye. The phone number provided on legal papers and purporting to be that of Dr. Frye belonged to someone else.
"The company also found that the medical report bearing Dr. Frye's signature included language identical to other medical documentation that it had received from other doctors around the country in support of asbestos suits. This led CSX attorneys to conclude that the Pittsburgh-based personal injury firm that filed the case in Marshall County had provided doctors with preprinted materials. They also were led to question how many other fraudulent claims were pending in West Virginia courts. The personal injury fi rm reacted by withdrawing from its representation of the client with the apparently fraudulent medical records, but reportedly has resisted efforts to verify the authenticity of other asbestos claims it has filed."
The report also mentions a real West Virginia doctor.
Ray Harron of Bridgeport reportedly was paid millions by personal injury lawyers to diagnose potential asbestos victims. He sometimes did it at the rate of one patient per minute, the report says. The New York Times has reported that Harron made 75,000 diagnoses since the mid-1990s, commonly reading as many as 150 x-rays per day, at a
rate of $125 each.
"Harron found himself called to testify before the United States Congress," the report states. "He refused to answer questions on the grounds of self incrimination and is reportedly facing criminal investigation. Dr. Harron also has come under national fire for reportedly double-diagnosing thousands of plaintiffs with both silicosis and asbestosis, even though the medical literature makes clear that the chances of contracting both conditions are remote."
ATRF does say West Virginia has taken steps to move forward.
"In recent years, the West Virginia Legislature has stepped in to try to restore some level of fairness to the state's civil justice system," the report states. "In 2005, the Legislature enacted reforms to address unfair joint and several liability that place minimally at-fault defendants at risk of paying the entire judgment. It also curbed third-party, bad-faith insurance suits."
"The enactment of medical liability reforms in 2001 and 2003 has dramatically helped improve access to medical care. …
"Further, Gov. Joe Manchin III has recognized that the reforms enacted under his predecessor, Governor Bob Wise, 'have worked, cutting medical malpractice lawsuits significantly and reducing the total amount of paid verdicts and settlements by over 50 percent.' Insurers have filed to cut their malpractice premiums by as much as 15 percent this year, the overall number of medical liability claims has fallen about 40 percent, and the state is on track to have a "banner year" in terms of attracting new doctors."
ATRA President Sherman Joyce said this year's top six Hellholes are in states "that recently enacted significant tort reforms, yet a handful of judges are either ignoring those reforms or otherwise abusing their discretion to distort cases in favor of plaintiffs. …
"By issuing this report each year, ATRF hopes to educate the public and the media who, in turn, will persuade Hellholes courts to provide equal justice under the law."
Schwartz said this year's report highlights several important trends.
"Overall, the type of extraordinary and blatant unfairness that sparked the Judicial Hellholes project and characterized the report over the past few years has decreased across-the-board," Schwartz said. "This improvement is a shared result of shining the spotlight on litigation abuse and the wise corrections by both the judicial and legislative branches of state governments. …
"But make no mistake, the danger of regression persists and is very real. New leadership at the organization formerly known as the Association of Trial Lawyers of America has pledged to undertake a massive political and public relations campaign. We're already seeing a post-election effort to rollback reasonable reforms and undermine the fairness and predictability of our civil justice system. Expect personal injury lawyers to fight for expansions of liability with so-called 'consumer protection' lawsuits and public nuisance actions, among other troubling tactics."