Eye of the beholder

Star Tribune

http://www.dfw.com
Here’s what you need to know about the American Tort Reform Association’s recent “Judicial Hellholes” report complaining about egregious bias against corporate defendants in civil litigation.

In one breath, the report defines “judicial hellholes” as places where judges “systematically” apply laws and court procedures in an “unfair and unbalanced manner.”

But the report also states that most judges “do a diligent and fair job for modest pay” and that their reputations are “undermined by the very few jurists” who do not.

So, is there systematic injustice plaguing the civil justice system, as ATRA would have the public believe? Or is the reality that ATRA exaggerates outcomes it doesn’t like and ominously cautions against backsliding, even though lawmakers and courts themselves have moved to curb unwarranted forum-shopping, mistaken class-action certification and large damage awards?

No doubt there’s valid information tucked into ATRA’s explication of six “hellhole” jurisdictions, six “watch list” locales, six “dishonorable mentions” and 10 “other areas to watch.”

But examine the fine print.

An example: For its claims that the Rio Grande Valley and Texas Gulf Coast “have earned a reputation as a ‘plaintiff paradise’ and a ‘lawsuit-happy hunting ground,'” the report cites in footnotes an Associated Press story that quotes ATRA counsel Victor Schwartz and a Corpus Christi Caller-Times story that starts, “A national study contradicts South Texas’ reputation as a lawsuit-happy hunting ground.” (We’ve added the italics.)

As “hellhole” proof, the report presents a $32 million verdict from a state-court jury in a Vioxx case. A footnote indicates that Texas’ punitive damage caps would reduce that to $7.7 million. But what ATRA doesn’t explain is that after it was discovered that a juror in the case had financial ties to the plaintiff, the judge gave lawyers for Merck & Co. (the Vioxx maker) access to bank and cellphone records to explore the extent of that relationship — a move that could undo the verdict entirely.

ATRA also complains that Marshall — described as “a well-known plaintiffs’ haven just north of the Texas Gulf Coast” (give or take 200 miles) — has become “a new growth area for entrepreneurial trial lawyers” because of a surge in patent litigation landing there. What ATRA doesn’t mention is that patent cases are filed in federal, not state, court because patents fall under federal law. Criteria for federal court jurisdiction are opposing parties from different states and more than $75,000 in dispute.

The New York Times reported in September that lawyers are attracted to the federal court in Marshall because of “quick trials and plaintiff-friendly juries.” But don’t imagine these are simply gold-diggers riding frivolous suits and local bias to lucrative windfalls. The Marshall court hears complicated, high-dollar, big-business patent-infringement litigation between the likes of EchoStar Communications and TiVo, Hyundai Electronics and Texas Instruments, Hyperion Solutions of California and OutlookSoft Corp. of Connecticut.

There’s no doubt that in various parts of the country opportunistic lawyers lurk in search of money-maker lawsuits. (Can you say fake guacamole class action?)

But that doesn’t make every large verdict unjustified.

There are judges who do their jobs poorly, and juries that sometimes get out of hand in their zeal to punish corporate defendants.

But that doesn’t make every evidentiary ruling against a defendant unjust or every punitive damage award unwarranted.

The system has rules for weeding out bad suits early and overturning erroneous damage verdicts on appeal. In some locations those need strengthening, refining and more faithful adherence. If laws are vague enough to result in unreasonable court interpretations that expand liability, perhaps elected representatives should draw those statutes more tightly, if that’s what voters want.

One concern ATRA’s report raises is about elected judges having to make tough decisions, then face constituents or being influenced by campaign contributors.

Funny that. Partisan judicial elections have long been a sore spot among good government advocates because of the hazards of potential conflicts, or the appearance thereof, when judges raise funds from lawyers, litigants and interest groups.

In Texas, business forces unhappy with the direction of liability law have not only persuaded legislators to overhaul tort law but donated heavily to judicial candidates. Even an all-Republican Texas Supreme Court can act unpredictably, though. And now tort reformers are warming to the idea of an appointed state appellate judiciary.

What constitutes unfairness in civil litigation is a matter of fierce debate.

The tort system, which covers lawsuits over personal injuries, medical malpractice, asbestos disease, faulty products and other types of harmful behavior, is designed to compensate those who are hurt and deter future damaging conduct. There is room for abuse by those with bad motives — on both the plaintiffs’ and defendants’ sides.

ATRA’s annual report helps shed light on a system that requires continuing public exposure to make sure it operates justly.

But keep in mind that this is one perspective, not the whole picture.

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