By the time most law students have finished the first year of law school, they’ve had the responses “yes” and “no” surgically excised from their thoughts and replaced by the signature American legalism–“it depends.”
And it does. Any attorney worth his salt knows a client’s fate frequently depends on the location of the courthouse deciding it. Horse thieves never fared well in frontier courts, but outlaws like Billy the Kid did. Even now, the worst place for an oil company to get sued is not necessarily the worst place for an investment bank. Still, defense attorneys largely agree that a few locales are worst-case-scenario venues.
“There is a high degree of stability in what most people think are the most problematic places to get sued,” said Walter Olson, a senior fellow at the Manhattan Institute and author of The Rule of Lawyers. “If you put pins on a map for the top 50 most outrageous verdicts, bizarre run-away juries and so forth, you would find this belt around the Gulf Coast that runs from southern Texas across Mississippi, Louisiana, Alabama and Florida. These are also some of the places people consider the worst places to get sued.”
The complicated part, Olson adds, is that the map looks different for specific types of lawsuits. Defendants in medical malpractice lawsuits might have the cards stacked against them in a court that tends to favor defendants in mass-tort suits. So Forbes.com asked the American Tort Reform Association (ATRA), which surveys hundreds of defense attorneys and corporate executives every year for its report on litigation abuse on “Judicial Hellholes,” to list the places identified by the largest number of survey respondents as the worst possible places to be a defendant in particular types of lawsuits. The list they produced has a surprise or two for nearly everyone.
Hit with a personal-injury lawsuit? Better hope it’s not in Starr County, Texas. Class actions? Hopefully you won’t find out why John Grisham sets so many legal thrillers in Mississippi. Construction suits? Building’s not the only thing booming in Clark County, Nev. And journalists hoping to avoid libel suits may wish to avoid courts in Philadelphia, according to ATRA’s report for Forbes.
Last summer, Arelia Margarita Taveras, a once-rising legal star who represented victims of the Sept. 11 terrorist attacks and earned as much as $500,000 annually, was disbarred after she admitted to improperly using client funds to pay for her gambling addiction. In March, Taveras sued several casinos in Atlantic City, N.J., and Las Vegas for allowing her to gamble away nearly $1 million. Taveras had an embarrassment of riches as far as deciding where to file her lawsuit, according to ATRA.
Taveras sued in New Jersey, rather than Nevada, underlining an important difference in how defendants measure litigation risk in certain venues. In states like Mississippi, which respondents to ATRA’s survey described as particularly hostile to class-action defendants, local business defendants often have a home-field advantage, whereas other states like New Jersey–home to many of the world’s largest pharmaceutical companies, and highlighted as a bad place for them to get sued–treat in-state defendants as roughly as out-of-state defendants.
“There are at least two types of problematic local-lawsuit cultures, the ones where the lawsuits mostly target in-state defendants like doctors and local governments, and the ones where it’s mostly out-of-state defendants,” says Olson. “As far as I can see, the south takes the shrewd, rational approach on this. In the south, they take out-of-staters and shake them upside down until the coins roll out of their pockets, whereas [litigants in] states like New York are foolish enough to sue the people who will ultimately send it right back to you in the form of medical bills or taxes.”
For example, so many doctors in Palm Beach County, Fla., got hit with lawsuits that by 2003, they began to flee the state to escape sky-high malpractice insurance costs. After the state legislature cracked down on the suits, the exodus slowed, but premiums remain astronomically high, especially for specialists like neurosurgeons. In early 2004, Palm Beach County had only four neurosurgeons covering 13 hospitals.
Not surprisingly, survey respondents listed the county as the worst-case-scenario venue for medical malpractice lawsuits.
Like other states, Florida’s medical malpractice reform has changed the ultimate risk calculations for many business defendants by increasing the likelihood that higher courts will reverse disproportionately large jury awards and other seemingly wacky court decisions on appeal.
“Its easy to make the case that the local culture of judges and juries hasn’t changed, even if appellate review is going to change the ultimate results,” said Olson. “There are still county courthouses in Mississippi where extremely bizarre things can happen to you, and you can only hope and pray that you’ll get reviewed.”