It’s been a quiet week for civil justice reform. Unsurprising, since failed attempts to override some of the Governor’s vetoes, school funding, and speculation over which congressional district will be eliminated during redistricting have dominated New Jersey politics.
To recap the 2010-2011 Session thus far, NJLRA supports the following bills:
“New Jersey is, in many ways, ground zero for mass tort in the US, with the majority of major drugmakers headquartered in the state.”
That’s where the accord stops. We celebrate the jobs, innovation, and life-saving drugs that our nation’s “Medicine Chest” generates. Trial lawyers are celebrating Accutane lawsuits, 3,100 strong, which were consolidated in Atlantic County Superior Court.
We’ve written about the popular acne drug Accutane extensively. It’s now off the market, due in large part to the cost of the settlements its manufacturer has had to pay.
Calling our state’s largest industry “ground zero for mass tort” isn’t exactly the encouragement New Jersey business owners and entrepreneurs need during these economic times. But to the detriment of everyone else, the only industry the trial bar is concerned with seems to be ‘litigation tourism.’
Can you imagine agreeing to a loan on which you would have to pay over 36 percent in interest?
Of course not, because it would be absurd unless you were really desperate.
Many states cap the interest rate a lender can charge its customers. In Indiana, for example, it’s capped at 36 percent – still a generous deal for the lender, but protects the borrower from being taken advantage of, and having to pay back much more than their loan is worth.
One group says a 36 percent interest rate is not high enough – and that they should be exempt from state lending laws. Meet the personal injury lawyers.
Some companies are in the business of advancing money to would-be plaintiffs involved in personal injury lawsuits. According to a New York Times report by Binyamin Appelbaum, there are about a dozen such companies nationwide, and several smaller companies. They collectively lend plaintiffs $100 million per year in increments of a few thousand dollars to cover their housing and medical expenses. Plaintiffs pay back their loans plus interest after lawyers win their case. If the lawyers lose, they owe nothing. The message seems to be that filing a frivolous lawsuit can be a pretty good investment.
Personal injury lawyers say that’s why they should be excluded from states’ loan caps: these aren’t loans – they’re investments. And they’re taking their show on the road to Legislatures across the country. Oasis Legal Finance in Illinois recently proposed exempting lawsuit lending companies from Indiana’s 36 percent cap on interest. Senator Randy Head said that Oasis’s advocacy first brought his attention to the issue, which resulted in his introduction of Senate bill 97. It included a modest restraint on lenders by preventing them from providing anything beyond money to plaintiffs, as well as assertions from the industry that they were attempting to self-regulate in the name of consumer protection. It was that portion that helped to carefully pitch it to the state Senate as a pseudo-reform bill and ultimately led to that chamber’s passage of it last month, with a vote of 36 – 14.
“Most of what they proposed is contained in the bill,” the sponsor acknowledged to the New York Times.
While “lawsuit lending” might help one who is truly besieged with medical bills and unable to work due to someone’s negligence as their case is being sorted out, it’s hard to deny that it also gives plaintiffs and their attorneys a hefty incentive to pursue the largest financial rewards possible.
The personal injury lawyers’ trade group is trying to carve themselves out of regulation through the legislative process in Alabama, Kentucky, and Maryland as well, and may be focusing on Arkansas and Nevada in the near future. The watchful eye of the chambers of commerce has kept efforts at bay in Kentucky, which have successfully blocked similar legislation from passing the state Senate. And since all of these bills were introduced in February 2011 or later, we may only have seen the tip of the iceberg in trial lawyer lobbying.
Tort reformers in all three states had significant victories this week.
In North Carolina, S-33 would cap noneconomic awards in malpractice cases at $100,000. It was advancing to the full Senate for a vote as of Thursday.
A similar piece of legislation passed the full Senate in Oklahoma. S-863 would cap noneconomic damages at $250,000.
Meanwhile, in North Dakota, progress was made in the judicial branch. A group of thirteen out-of-state plaintiffs had filed a product liability suit in North Dakota, which has one of the longest statutes of limitation in the country. The state Supreme Court ruled in favor of the defendant in Vicknair v. Phelps Dodge. Several groups, including NFIB and the U.S. Chamber of Commerce, argued that the statute of limitations from the plaintiffs’ home states should be applied, not the more plaintiff-friendly statute of limitations in North Dakota.
New Jersey-based drug maker Merck achieved the improbable: it won a case in New Jersey’s hottest “Judicial Hellhole.”
The Star-Ledger reports that 9 out of the 10 jurors in an Atlantic County Superior Courtroom didn’t believe Merck’s osteoporosis drug Fosamax was the source of a Pennsylvania woman’s jawbone condition, called osteonecrosis. Merck’s lawyers argued that the plaintiff’s extensive dental problems and a steroid she used may have been to blame.
Nearly 300 lawsuits are involved in the mass tort case. It was an important first victory, even if it is one the plaintiff’s attorneys will almost certainly appeal.
Atlantic County, New Jersey, was named by the American Tort Reform Association as one of the nation’s Judicial Hellholes in 2009.
A new bipartisan issue caucus in Congress was announced today- the Congressional Civil Justice Caucus, which will focus on legal reform issues. NJLRA is excited, to say the least.
I applaud Congressmen Bob Goodlatte (R-VA) and Dan Boren (D-OK) for taking the lead on this issue at the Congressional level. It’s helpful to have a bipartisan caucus focus on advancing a civil justice system conducive to the United States’ global economic competitiveness.
Here in New Jersey - a state where consumers have neither an obligation to ask for a refund before taking a business to court, nor to have encountered actual fraud in order to sue under the state Consumer Fraud Act - the Caucus carries a special significance for us. It shows the hardworking men and women of our state that members of Congress are willing to carry our fight against lawsuit abuse to the highest levels of government. Knowing that we have support as we try to stop the hemorrhaging of our key industries is invaluable.
Most importantly, the Congressional Civil Justice Caucus gives us the opportunity to expose the target that the pharmaceutical industry has on its back in our state. In the last year New Jersey shed 7.6 percent of its pharmaceutical jobs, due in part to litigation tourism by the trial bar. Instead of the nation’s “Medicine Chest,” we are becoming a national leader in pharmaceutical job exportation.
Ninety-three percent (93%) of the mass tort plaintiffs in New Jersey suing our pharmaceutical companies are out-of-state residents seeking the use of our plaintiff-friendly laws. This is an unacceptable situation we must correct in order to achieve solid economic growth. I am hopeful that the Caucus will push for reforms similar to A-3333, sponsored by Assemblyman John McKeon (D-Essex) in states where the Consumer Fraud Act encourages abuse.
New Jersey is quickly losing ground to other states which have enacted common sense tort reform measures. I encourage all members of New Jersey’s congressional delegation to support the Civil Justice Caucus and participate in this bipartisan forum.
Sherman “Tiger” Joyce, president of the American Tort Reform Association (ATRA), had the following to say about New Jersey’s prospects for civil justice reform in The Metropolitan Corporate Council publication:
“Of course, the litigation industry also remains strong throughout New Jersey, home to once-and-future judicial hellholes, and ATRA expects it to again push an expansion of wrongful death liability while actively opposing consumer fraud reform. But tort reformers, backed by Governor Chris Christie, have some momentum. They support three affirmative reform bills already filed during the current legislative session. One seeks to limit appeal bonds to the total value of the monetary judgment or $50 million, whichever is less. Another would revise the individual's cause of action under the Consumer Fraud Act and make other revisions regarding applicability (see trial lawyers' opposition noted earlier). The third pertains to liability, standards of care and insurance coverage for medical malpractice actions.”
The American Tort Reform Association (ATRA) released its annual “Judicial Hellholes” report for 2010/2011. Marcus Rayner spoke with NJ 101.5 about how this reputation continues to stifle economic growth in our state, and particularly impacts New Jersey’s job-wielding pharmaceutical industry.
An excerpt:
Marcus Rayner, Executive Director of the New Jersey Lawsuit Reform Alliance, explains why the report specifically names Atlantic County. He says the New Jersey Supreme Court has chosen to consolidate the Mass Tort litigation in the pharmaceutical industry in Atlantic County under one judge, Judge Carol Higbee, who has experience here. Unfortunately, her rulings have been inconsistent and often against he pharmaceutical industry."
Rosetta Key’s report can be found on 101.5’s website. The Hellhole report can be found on ATRA’s website.
NJLRA will join with other tort reformers today at the American Tort Reform Association’s Annual Legislative Conference. This year’s conference is being held at The Hyatt Lodge in Oak Brook, Illinois. Speakers include Florida Attorney General Bill McCollum and the Honorable Mary-Dulany James of the Maryland House of Delegates, who will offer a legislative perspective about the False Claims Act.
Executive Director Marcus Rayner was recently interviewed by the editor of the Metropolitan Corporate Counsel, a publication dedicated to serving the interests of corporate counsel.
NJLRA: Fostering Business Growth And Job Creation. Published on November 2, 2010
An excerpt:
Editor: How important has the legal climate been in discouraging businesses from coming to New Jersey or from succeeding here?
Rayner: New Jersey presents many challenges for businesses and those they employ, including the high cost of living, regulations, and taxes. The civil justice system is something businesses consider when deciding where to locate and expand. Unfortunately, one of our largest industries - the life sciences and pharmaceutical industry, as well as healthcare - is the most susceptible to litigation abuse because of the large number of people it serves.
When you sell medical devices and pharmaceutical products, you are servicing people who are, in many cases, facing a disease or a physical challenge that these items are helping them to overcome, and the results can vary across populations. It is important for the large industries that are critical to New Jersey's economic success that our laws be fair. We did a study in 2008 of all the mass tort litigation facing pharmaceutical manufacturers here in the state. It found that 94 percent of the plaintiffs in these cases were from outside the state. They chose to sue under New Jersey law and before New Jersey judges rather than in their home states because the legal environment here is much more favorable to their lawsuits.
The legal climate here is much worse than that in Delaware, Pennsylvania, or New York. Businesses here face a toxic combination of our Consumer Fraud Act, court rulings on things like the statute of limitations on discovery, and, most acutely, New Jersey's weak standards for expert evidence testimony in a courtroom. When you are talking about medical liability suits and product liability suits against manufacturers of medical devices and drugs, the quality of the expertise admitted in a courtroom is critical. When the door is wide open to unqualified witnesses and unscientific testimony, you get grossly unfair results.
Click here for the full interview.
Senator Ray Lesniak (D-Union) spoke at NJLRA’s Fall Membership Luncheon at the Trenton Country Club. He is the sponsor of S-480, the Appeal Bond Cap.
Senator Lesniak expressed the Senate Economic Growth Committee’s interest in hearing tort reform proposals. He is the Economic Growth Committee chair and is also a member of the Senate Judiciary Committee.
The American Tort Reform Association reports today that Arizona has fixed its evidentiary standards. They write:
S.B. 1189 (Barbara Leff-R) was signed by Governor Brewer on May 10, 2010. This legislation adopts the Daubert standard for admitting expert witness testimony and expert evidence; Arizona Courts currently embrace the less stringent Frye standard. The Daubert standard requires the courts to consider four factors when examining the merits of expert testimony: (1) whether the expert’s technique or theory can be tested; (2) whether the theory has been subject to peer review and publication; (3) the known or potential rate of error of the technique or theory; and (4) whether the theory or technique has been generally accepted in the relevant field. Currently, 37 states have adopted the Daubert standard in part or in whole, and 24 states apply the standard to both civil and criminal cases. This standard substantially decreases the probability of “junk science” being presented to juries, thus, affecting the outcome of a trial. It also serves as a filter that screens out ungrounded lawsuits from even reaching trial, which is especially important for manufacturers facing questionable product liability claims and health care providers facing questionable medical malpractice claims.
Thirty-seven states have adopted the more stringent Daubert standard. Think New Jersey is one of them? Think again. NJLRA is asking the NJ Courts to adopt a stronger expert testimony standard. You can read about our work on the subject here.
AS NEW JERSEY’S unemployment rate hovers around a regionally high 10 percent, our businesses face a stagnant economy coupled with high business costs, and our state and local governments must address significant spending cuts, some may not realize that New Jersey’s economy is taking another serious hit – from frivolous litigation.
According to Forbes Magazine, New Jersey is “one of the worst places to get sued in America.”
The American Tort Reform Association has listed New Jersey in its Top Five “Judicial Hellholes” for the third consecutive year. And that’s not an overstatement: For many high-tech, bio-tech and research-based companies, one frivolous lawsuit can spell financial ruin, and send ripple effects through our struggling economy.
Consider this: Consumers do not have to be defrauded in order to file a lawsuit under New Jersey’s Consumer Fraud Act. They don’t have to ask for a refund before suing in court, either. Warnock Dodge found this out when a customer believed she was overcharged by $40 and immediately marched to court. New Jersey courts also welcome out-of-state plaintiffs.
In one such case, an Alabama resident who claimed a popular acne medication gave him inflammatory bowel syndrome received a $25 million judgment – money he will take with him to Alabama.
A potential class action lawsuit against the Blimpie sandwich chain is looming in Madison County, Illinois, a fellow Judicial Hellhole. According to two customers, the sandwich makers did not put enough meat on their “Super Stacked” subs. Their lawsuit alleges that Blimpie’s claim of “double portions of meat” on these premium-priced subs is false, even though they concede that there is no “regular” sub on Blimpie’s menu for comparison. The court must now decide if this amounts to statutory fraud.
The classic image of a dissatisfied customer seems to be becoming a thing of the past, as more dissatisfied customers opt for multi-million dollar litigation over refunds (See Bosland vs. Warnock Dodge). For its part, Blimpie said on its website that it would have been happy to handle the customers’ complaints at the store level.
According to Keegan Hamilton’s report in the RiverFront Times News Blog, the plaintiffs’ lawsuit was filed by the powerful LakinCapin law firm in Wood River, Illinois. The attorneys hope to make it class action suit, which would allow anyone in Illinois who believes that Blimpie short changed their sandwich meat to receive “compensation for costs and attorney fees and other relief deemed “just and appropriate.”
TheTelegraph.com offers the following insight about the case on their website:
“Courts today are too often becoming the first bastion, not the last, for resolving consumer complaints. We can only imagine what’s next. Will it be Maxwell House because one cup of coffee wasn’t good to the last drop? Or Burger King, because maybe somebody really can hold a Whopper with only one hand?”
Imagine how much meat the plaintiffs will be able to buy if they are successful.
Last week, the Illinois Supreme Court struck down a cap on medical malpractice awards. The law, enacted by then-Governor Rod Blagojevich, capped non-economic damages against doctors at $500,000, and at $1,000,000 against hospitals. The exodus of doctors from the state, particularly in the high-premium specialties of neurosurgery and obstetrics, prompted the Legislature to prioritize tort reform. At that time, according to the American Medical Association, doctors began to limit services retire early, or move to other states were liability premiums were more stable, rather than try to absorb the average 10 to 12 percent in increases each year.
Many of us are deeply concerned about the ruling. Some are speculating that the possibility for unlimited damages will further restrict access to care for Illinois residents in high-premium fields. James Rohack, President of the American Medical Association, said that doctors faced significant obstacles prior to 2005, and cautioned that such conditions are now likely to return.
In the 4-2 decision, the majority wrote that the
Legislature had overstepped its boundaries.
The $500,000 figure was also described as arbitrary
by the justices. Dissenting Justice
Lloyd Karmeier noted the irony of the majority’s decision: by finding that the
Legislature’s effort to impose noneconomic caps “runs afoul of the separation
of powers clause,” the Judiciary interjected itself into the legislative process. "We
have no business telling the General Assembly that it has exceeded its
constitutional power if we must ignore the constitutional constraints on our
own authority to do so," he said.
The 2005 legislative remedy to Illinois’s healthcare crisis – the makings of which we may be experiencing in New Jersey as well – stemmed from a grassroots effort led by the Illinois Civil Justice League, the Illinois Lawsuit Abuse Watch, and other tort reform groups. This was their second legislative success in securing noneconomic damage caps, and the second time it was reversed by the Illinois Supreme Court. For everyone’s sake, let’s hope the trial bar doesn’t win a third time.
During the summer, everyone from NJLRA and Walter Olson, to the California Civil Justice Association (CJAC) and Ralph Nader lamented the $25 million dollar settlement trial lawyers received in a class action lawsuit involving Ford Motor Company. Nearly one million litigants who owned Ford Explorers in the 1990s argued that rollover risks diminished the resale value of their vehicles. Coupons were available (via application), to the litigants, but were largely unusable.
NBC Nightly News underscored this atrocity in during their Monday evening broadcast. They aired a segment questioning the trial lawyers’ motivation behind this class action suit, and noted that the judge awarded the $25 million figure to the lawyers for their “exceptional skill.”
You can listen to the NBC Nightly News Broadcast here, or on our Facebook page.
As the national debate on
health-care reform and tort reform unfolds, it is worth noting that here in New
Jersey, we have our own health- care crisis under way. And it is driving out
physicians, limiting patient access to care and increasing the cost of health
care for all of us.
Recently, I spoke to a
young man who is studying medicine at the University
of Medicine and Dentistry of New Jersey (UMDNJ). A lifelong New Jersey
resident who excelled as an undergraduate, he represents the best and brightest
our state has to offer. With grand aspirations of becoming a doctor, he
enrolled at UMDNJ, hoping to someday practice in his home state. Unfortunately,
he has come to realize that his dream of practicing specialized medicine faces
a significant hurdle -- and it's not just rotations.
This promising young
medical student, whom I will call Jim, has become a casualty of our litigious
health-care system. Growing up in a large family fostered Jim's interest in
delivering babies, prompting him to study obstetrics. Earlier this year,
however, reality hit: Jim has the talent to become an OBGYN, but lacks the
bottom line.
"I can't afford
it," Jim realized. "I went to medical school thinking that if I
worked hard enough, I would be able to practice my specialty of choice. Not
being able to become an OBGYN because I can't afford malpractice insurance was
the furthest thing from my mind."
In his December 13th Op-Ed, John Farmer Jr. correctly suggested that Governor-elect Christie utilize his office’s institutional powers to take control of the budget process as he prepares to “turn Trenton upside down.” But with so little room to maneuver on budget issues, the new governor must also look for ways to improve the business climate immediately, and tort reform is an area where the Governor-elect should focus.
The American Tort Reform Association (ATRA) recently cited New Jersey as a “Judicial Hellhole” due to our state’s reputation for lawsuit abuse. Ninety-three percent of the lawsuits filed against our pharmaceutical companies in mass torts were from out-of-state litigants, whose cases would never see the light of day in their home jurisdictions. Large employers and local governments alike are continually increasing their legal defense budgets to fight frivolous litigation, exacerbating New Jersey’s affordability problem. We can’t let New Jersey become, as Mr. Farmer calls it, “the East Coast’s California.” Tort reform is a revenue-neutral policy reform that will improve the business climate, paying off in the form of more jobs, more innovation, and a stronger New Jersey. It may also offer one of the best ways for this governor and pro-business democrats in the legislature to send the message that New Jersey is open for business again.
Imagine being named the worst state for business and a “hellhole” by judicial standards in the same week.
Unfortunately, New Jersey is wearing both crowns for the second consecutive year.
The Small Business & Entrepreneurship Council released its Small Business Survival Index 2009, placing New Jersey, once again, at the bottom of its list.
The Survey comes just after New Jersey earned the #4 spot on the American Tort Reform Association (ATRA)’s annual “Judicial Hellholes” Report –for the third consecutive year.
Both seem to concur with the Tax Foundation’s annual study of state tax and regulatory environments, which decried New Jersey as the worst state in which to do business back in September.
FOR IMMEDIATE RELEASE Contact: AnnMarie McDonald
December 15, 2009 (609) 649-3167
amcdonald@njlra.org
REPORT: NEW JERSEY IS A HELLHOLE
Citing a “culture of litigation,” American Tort Reform Association says
that excessive litigation has compromised access, affordability of prescription
drugs; schools in Atlantic County also hurt.
ATLANTIC CITY, N.J. – A report released today by the American Tort Reform Association (ATRA) places New Jersey’s courts at number 4 in its annual list of “Judicial Hellholes,” with a particularly dire situation in Atlantic County.
“Every dollar spent defending against a groundless lawsuit
is a dollar that won’t be spent on research and development, capital
investment, worker training or job creation,” said ATRA President Sherman
“Tiger” Joyce. “Unfortunately for those
living in Hellholes jurisdictions during this economic downturn, it can be that
much harder to find or keep a job and get critical health care services as
employers and doctors are driven away by the
threat of costly litigation.”
Even more alarming is
the impact that excessive litigation is having on Atlantic City’s struggling
school district. The report notes that the
Atlantic City School District spent roughly $1.5 million on legal services last
year, more than every other school district in the state by a substantial
margin. This school year, Atlantic City
has budgeted $1.16 million for its legal services, equating to approximately
$184.00 for each student in the district.
The
full text of ATRA’s report can be found on NJLRA’s website, http://njlra.org
# # #
The New Jersey
Lawsuit Reform Alliance (NJLRA) is a statewide, bipartisan group of businesses,
individuals and organizations committed to improving the State’s civil justice
system by advocating for legal reforms in the legislature and in the courts.
NJLRA believes a balanced civil justice system is critical to ensuring fair and
open courts, maintaining and attracting jobs and fostering economic growth in
