State legislative leaders on Thursday celebrated West Virginia’s removal from the “Judicial Hellholes” list, a report published by a corporate-funded group that pushes for business-friendly legal reforms.
The American Tort Reform Association removed West Virginia from its list, but the state remains on the organization’s “watch list.”
That’s despite the passage of seven separate pieces of pro-business legal reform legislation last spring.
Even those who produce the annual “Judicial Hellholes” report acknowledge it is not methodologically sound and has no basis in social science — yet it carries great influence with state lawmakers.
“We have said for years that this is a report, it is not a study,” said Darren McKinney, communications director for the American Tort Reform Association. “It is not a scientific study, it is not based on statistical number crunching, it is based on what we hear from, largely defendants, and others in these various jurisdictions around the country.”
There is, for instance, no rationale given for the rankings. Why is the entire state of California the country’s number one “judicial hellhole” while Florida is ranked number three and Missouri is number four? The report doesn’t say, but it does detail lots of anecdotes about each jurisdiction’s court systems.
Nonetheless, state legislators have, for years, used the list as a rationale in the push to enact legal reform.
West Virginia has remained on the list since its inception in 2001, despite passing several legal reform provisions in years past, including caps on medical malpractice damages, limits on liability and restrictions on lawsuits by out-of-state plaintiffs.
Last spring the state’s new Republican Legislature shepherded through a bevy of legal system legislation, including non-partisan election of judges, a cap on punitive damages in lawsuits and changes to the state’s “deliberate intent” law to make it harder to sue. ATRA changed West Virginia’s status on its list because of those changes.
On Thursday, state Senate President Bill Cole and House Speaker Tim Armstead held a press conference to celebrate the state’s removal from the “hellhole” portion of ATRA’s list.
“We believe that we have struggled under a reputation nationally that has hurt us in terms of creating jobs in West Virginia,” said Armstead, R-Kanawha. “Those that wanted to come to invest in West Virginia, that looked at West Virginia, this has been a black mark on us for several years and we are excited that it is now gone.”
Cole, R-Mercer, a likely Republican candidate for governor, said that all the legal reforms passed by the Legislature were about bringing West Virginia in line with other states. He also noted that every reform bill passed with at least some bipartisan support.
“All we did was bring West Virginia to the middle,” he said. “We just came to the middle, we became average, we became competitive at the same time.”
Cole noted a letter that he received from Progressive Insurance in August, in which the company wrote that it lowered rates about 3 to 6 percent, and credited the Legislature’s action.
The West Virginia Association for Justice, a trial lawyers’ group, said the reforms passed by the Legislature were “a solution to a problem that never existed.
“ATRA’s widely discredited ‘Judicial Hellhole’ report is a PR campaign designed to bully lawmakers into passing its legislative agenda, not a legitimate analysis of anything,” the group said.
Both Armstead and Cole said they understood that the rankings are subjective, but that they were still important.
“There’s no question it’s subjective, but it’s in the eye of the beholder,” Cole said. “Perception becomes reality, so if the people that are looking at us believe that, then it’s at least true to them.”
Armstead said that legislative leaders’ talks with corporate lawyers and CEOs gave them confidence in the rankings.
“They’ve worked in the courtrooms, they know what changes process, they know what’s fair and what’s not fair and they have been an important component in making this determination,” said Armstead, a lawyer. “When you’re talking about anything in a legal realm, it’s hard to have a statistic about fairness. Fairness is something that you see every day when you practice in our court systems.”
West Virginia Citizens Against Lawsuit Abuse, a group affiliated with ATRA, praised Cole and Armstead for their “visionary new leadership,” and said they will push for more legal reforms, such as an intermediate court of appeals.
Armstead said Legislative leadership is still considering whether to pursue an intermediate court of appeals, a longtime goal of Republicans and legal reform groups, during the next session.
In September he said the intermediate court was “at the top of our list,” but on Thursday he said the key will be finding a “cost effective” way to do that, mentioning the budget constraints that the state is dealing with.
Through the first five months of the current fiscal year, state tax revenues are $114 million below expectations, and state agencies have been ordered to cut their budgets. Last year, a proposal for a new intermediate appeals court was projected to cost about $9.8 million.
The American Tort Reform Association identifies a short “sample list” of its members on its website. Those include the railroad Company CSX, the American Medical Association, Coca-Cola, Eli Lilly, ExxonMobil and Koch Industries.
“The law does not require us to make them public,” McKinney said of their funders. He said most of them were major manufacturers, trade groups, pharmaceutical firms and insurers.
“It’s certainly fair to say that the bulk of our funding comes from those defendants who are typically in the crosshairs in our judicial hellholes,” he said.
In his State of the State address a year ago, Democratic Gov. Earl Ray Tomblin denounced the list.
“I resent those who irresponsibly label us a judicial hellhole,” Tomblin said. “Unreasonable and irrational labels drummed up by out-of-state interests do not help our efforts to engage potential investors and strengthen our economy.”
In the end, however, Tomblin signed every legal reform bill passed by the Legislature.
Reach David Gutman at david.gutman@wvgazettemail.com, 304-348-5119 or follow @davidlgutman on Twitter.