Courts in ‘Judicial Hellholes’ Less Likely to Abide by SCOTUS Precedent
By: American Tort Reform Association
Tags: Forum, Venue, Supreme Court, Judicial Reform, Legal

There is a growing trend across the nation of state courts in “Judicial Hellholes” rejecting U.S. Supreme Court precedent and improperly expanding personal jurisdiction for those courts. The American Tort Reform Foundation’s 2020 Judicial Hellholes report highlights this emerging problem and points to a handful of 2020 decisions that highlight it.

Judicial Hellholes are deemed the most unjust local courts and state civil justice systems in the country. The 2020 report ranks nine Judicial Hellholes while shining a light on lawsuit abuse. It further demonstrates that these jurisdictions are outliers in contrast to the rest of the nation

The U.S. civil justice system costs $373 billion annually. Excessive tort costs and lawsuit abuse in Judicial Hellholes clog courts, drain government tax revenue, and drive employers and jobs out of the state.

An emerging commonality among Judicial Hellholes is a failure of judges to weed out cases that simply don’t belong in in their courts. State judges must follow the supreme court of the land when there is controlling precedent and resist the urge to open their courtroom doors to plaintiffs across the country.

The U.S. Supreme Court held in its 2016 Bristol-Myers Squibb decision that a state cannot exercise personal jurisdiction over a company that is not incorporated or headquartered in that state, when the plaintiffs do not live in the state, and events related to the alleged injury did not occur there. The U.S. Supreme Court ruled that in California, a perennial Judicial Hellhole and № 3 on this year’s list, the courts lacked the specific personal jurisdiction required to hear the case.

Following this landmark decision, state courts have had numerous opportunities to properly apply the precedent and restrict abusive forum shopping. While many states strictly adhere to SCOTUS precedent, a handful of state courts in Judicial Hellholes refuse to comply.

This year, for example, in the № 1 Judicial Hellhole, the Supreme Court of Pennsylvania had its first opportunity to apply the BMS ruling, but it failed miserably. In Hammons v. Ethicon, Pennsylvania’s Supreme Court openly defied the U.S. Supreme Court by allowing an Indiana resident to sue Ethicon, a New Jersey-based company, in Pennsylvania.

The singular connection between the parties and Pennsylvania was a Pennsylvania-based company, Secant, that Ethicon contracted with to design, test and manufacture the product. Of course, the plaintiffs’ lawyer clearly decided Philadelphia would be the most favorable place to sue.

In his dissent, Pennsylvania’s Chief Justice stated: “Since the Supreme Court of the United States is the highest authority … I am unable to join an opinion of a state court that does not abide by its latest pronouncement.”

Keeping with the problematic trend, in November, the Missouri Supreme Court refused to review a decision by № 7 Judicial Hellhole, the City of St. Louis Circuit Court, which awarded 22 plaintiffs, including 15 nonresidents, more than $2 billion in damages in a class action brought against Johnson & Johnson involving their talc powder. On appeal was whether the City of St. Louis Circuit Court had jurisdiction over the case, in addition to other issues.

The U.S. Supreme Court is reviewing decisions by both the Minnesota Supreme Court, included in the № 9 Judicial Hellhole, Minnesota, and the Montana Supreme Court, included in the Judicial Hellholes “Watch List,” to exercise jurisdiction over Ford Motor Company in two cases that have no significant connection to the states in which they were filed.

This trend places impossible burdens on businesses that attempt to navigate the lack of predictability and uncertainty caused by such incongruous decisions.

These expansive decisions plainly create economic uncertainty and enable more forum shopping as plaintiffs’ lawyers flock to Judicial Hellholes to file their cases. Further, these lawyers spend millions of dollars advertising in these cities and states to drum up even more business. For example, in just one half of last year, trial lawyers in Philadelphia spent nearly $11 million on 73,000 local TV ads to solicit more clients.

Even before the pandemic and shutdowns, the excessive tort costs in Judicial Hellholes like California, Illinois, Missouri, and Louisiana resulted in a total annual loss of $24.2 billion in personal income and nearly 400,000 jobs lost. Taxpayers are stuck footing the bill for this hidden “tort tax,” costing more than $760 per person each year in the most litigious states.

When state courts fail to follow the Supreme Court’s precedent on personal jurisdiction and allow out-of-state lawsuits to fill their dockets, it restricts access to justice for local taxpayers and further strains an already overburdened court system.

To create a thriving economy and reduce the tax burden for everyday citizens, state judges must adhere to U.S. Supreme Court precedent and refuse to allow plaintiffs to drag out-of-state defendants into their courtrooms when the highest court in the land has determined they do not belong there.