By Gerald L. Maatman, Jr.

Each year the American Tort Reform Association (“ATRA”) publishes its “Judicial Hellholes Report” and examines problems in state court systems and challenges for corporate defendants in the fair and unbiased administration of justice.

The ATRA’s 2014 Report was published this morning; a copy is here, as well as an executive summary here.

Insofar as the Report identifies and defines a judicial hellhole as a jurisdiction where judges in civil cases systematically apply laws and procedures in an unfair and unbalanced manner, the Judicial Hellholes Report is an important read for corporate counsel facing class action exposures. In sum, if one has to litigate class actions and make decisions with respect to venue strategy, the Report is a “must read.”

The 2014 Hellholes

The ATRA included 7 jurisdictions on its hellholes list – including New York (especially in its treatment of asbestosis litigation in New York City), California, West Virginia, Florida (especially rulings of the Florida Supreme Court), Illinois (especially Madison County, Illinois), Missouri (especially rulings of the Missouri Supreme Court), and Louisiana – where it ranked the venues as the “most unfair” in their handling of civil litigation. Commenting on California in particular, the Report asserts that it is characterized by “a generally permissive judiciary that invites wholly absurd lawsuits that clog dockets, even as the state’s perpetually precarious finances have led to sharp cuts in court budgets.”

The 2014 “Watch List”

The ATRA included 6 jurisdictions on its “watch list,” including New Jersey (especially Atlantic County), Mississippi (in the Delta region), Montana, Nevada, Virginia (principally in the Newport News area), and Pennsylvania (especially in Philadelphia). Just a notch below the 7 hellholes, the “watch list” jurisdictions also present significant challenges for corporate defendants.

Implications For Employers

The Judicial Hellholes Report dovetails with the experience of employers in high-stakes workplace class actions, as California, Florida, Illinois, Nevada, New Jersey, New York, and Pennsylvania are among the leading states where plaintiffs’ lawyers file employment discrimination and wage & hour class actions in state courts. These jurisdictions are linked by class certification standards that are more plaintiff-friendly and generous damages recoveries under state laws.