For years defendants in tort cases have said that Philadelphia's courts are biased, but little in the way of empirical data was available to substantiate the claims.
But, a new study - by Professor Joshua D. Wright for the International Center of Law and Economics (ICLE), Portland, Ore. - indicates that the accusations of structural biases in favor of plaintiffs are justified.
Wright is a law professor at George Mason University School of Law School in Arlington, Va.
The study, originally published in October 2011, has updated information as of February 2012 that confirms its original hypothesis that Philadelphia courts are biased towards plaintiffs.
Initially, the study attempted to answer whether the Philadelphia courts engaged in "litigation tourism," a practice of plaintiffs' attorneys from out-of-state locales suing in courts that have advantageous rules and procedures for defendants.
The study considered all the civil courts in Philadelphia including the Complex Litigation Center (CLC). It determined that Philadelphia is a plaintiff friendly place.
"This preliminary analysis (of a sample of approximately 20% of the Philadelphia Complex Litigation Center's active cases) strongly supports the conclusion that Philadelphia courts demonstrate a meaningful preference for plaintiffs by providing a unique combination of advantages for plaintiffs aimed at coaxing 'business' from other courts outside of Philadelphia and the state," the ICLE study states.
It lists the following as preliminary evidence to back up its claims:
- More than two-thirds of the cases in the sample were brought by plaintiffs located out-of-state and without any apparent connection to Pennsylvania or Philadelphia.
- Of those cases where injury or home address could be determined, fewer than one in seven was brought by plaintiffs residing in Philadelphia.
- The most substantial case types where the plaintiffs were overwhelmingly out-of-state were: hormone therapy, denture adhesive cream, and Paxil birth defect cases.
- Although most or all of the companies involved in these cases do business in Philadelphia and a few have some sort of administrative offices here, the vast majority of defendants do not have their principal place of business in Philadelphia or even in Pennsylvania.
According to the study, Philadelphia employs several "plaintiff-friendly procedural devices, including a more lenient standard for expert testimony and, until recently, a broad application of joint and several liability, where multiple contributors to a tort harm could be held responsible for the entire injury - no matter how small their relative fault. Philadelphia courts compound these with permissive procedural rules including a 'reverse bifurcation' trial, where damages from a purported wrong are calculated prior to establishing liability - as opposed to the normally bifurcated trial, where a plaintiff must establish liability before proving damages."
Last month, however, the CLC temporarily suspended the practice of reverse bifurcation, announcing it would take trials straight through during a study period.
The ICLE monograph continued, "The Philadelphia Complex Litigation Center (CLC) perhaps distinguishes Philadelphia from other Pennsylvania courts; ...hears mass-tort cases and has openly stated its desire to lure 'business away from other courts.' The American Tort Reform Association has labeled Philadelphia courts as a 'judicial hellhole,' amongst the most plaintiff-friendly and lawsuit-inviting jurisdictions in the nation."'
ICLE analyzed litigation trends and outcomes in Philadelphia in relation to the rest of Pennsylvania and the United States. It said that the CLC, which specializes in mass torts and other potentially large-verdict cases, is the main cog that turns the wheel of Philadelphia's litigation environment.
The CLC deals with product liability cases such as asbestos and pharmaceutical litigation. It also attracts class actions where many plaintiffs have little or no connection to Philadelphia.
The procedures adopted by the CLC appear to have successfully increased litigation, bringing in more clients and more work for Pennsylvania lawyers, though likely at significant cost to Pennsylvania consumers and businesses alike, the study states.
The ICLE study also asserted that Philadelphia courts: a) have a larger docket than expected; b) Philadelphia plaintiffs are less likely to settle than other non-Philadelphia Pennsylvania plaintiffs; and c) Philadelphia plaintiffs are disproportionately likely to prefer jury trials.
According to the ICLE, these findings are consistent with a conclusion that Philadelphia courts demonstrate a marked and meaningful preference for plaintiffs, "consistent with both the CLC's intention" of inviting "business" from other courts. It also comments that Philadelphia's courts are a plaintiff-friendly venue.
Philadelphia juries also render unusually high numbers of large damage awards, says the ICLE study, with verdicts routinely exceeding $1 million.
Out-of-state plaintiffs' lawyers prefer the CLC due to its quick and relatively rigid trial dates that outpace the federal Eastern District of Pennsylvania and Multi-District Litigation counterparts; the Philadelphia courts in turn strictly enforce a procedural rule requiring out-of-state attorneys to retain local counsel in prosecuting suits.
While the CLC's caseload declined from more than 15,000 cases in 2004 to just under 3,000 in 2008, Judge Sandra Mazer-Moss replaced Judge Allan Tereshko as coordinating judge of the CLC in 2009 and a new era began. Mass-tort cases in the CLC began anew with hormone replacement therapy suits against several pharmaceutical companies.
ICLE maintains that the implication of its study is that the Philadelphia courts - and the CLC in particular - attract a substantial share of plaintiffs to file cases in the jurisdiction even when neither the plaintiff nor the alleged injury has a connection to Philadelphia or, in many cases, even the state of Pennsylvania. This has been confirmed by data recently added in February 2012 that indicated a fraction of plaintiffs with cases pending at the CLC have no discernible or relevant connection to Philadelphia or to Pennsylvania.
"Using case inventories obtained from the CLC ...we were able to identify the Plaintiff's home address in 1,355 cases," the study says.
"We identified electronically filed complaints in 638 cases and were able to identify the Plaintiff's location of injury in 369 cases. ...Of the 1,357 cases ...67.2% were out-of-state without any apparent connection to Pennsylvania or Philadelphia. Only 13.3% lived in or alleged injury in Philadelphia. The case types which provided the most out-of-state plaintiffs were overwhelmingly Hormone Therapy, Denture Adhesive Cream, and Paxil Birth Defect."
When the report considered only the plaintiffs' home addresses, similar results were yielded. Only 6.1% had Philadelphia home addresses, whereas 72.8 percent reside out of state.
Regarding those cases where evidence of the location of the plaintiff's injury was available electronically, 35.8% of the plaintiffs alleged injury occurred in Philadelphia and only 33.1% alleged injury occurred in another Pennsylvania county.
Nearly all were asbestos cases with 123 plaintiffs reporting exposure in Philadelphia and 119 more plaintiffs reporting exposure in another Pennsylvania city. If they are excluded, only 16% of plaintiffs allege injury in Philadelphia and 12% in another Pennsylvania city.
ICLE claimed that it did not systematically analyze the defendants' locations. It said it appeared that the majority named in major cases in the CLC do not have corporate headquarters in Philadelphia (or Pennsylvania).
For the hormone therapy, asbestos, denture adhesive, and Paxil birth defect cases, which was more than 95% of their sample, the main and largest defendants were Wyeth/Pfizer, GlaxoSmithKline/SmithKline Beecham, Barr Pharmaceuticals/Teva Pharmaceuticals, Goodyear Tires, and Ford Motor Co.
Wyeth has a pharmaceutical division headquarters in Collegeville, Pa. But it is owned now by Pfizer which has a New York City headquarters. Glaxo's U.S. corporate headquarters is in Philadelphia.
Barr Laboratories is a fully owned subsidiary of Teva Pharmaceutical which is headquartered in Montvale, N.J. Goodyear Tires is located in Akron, Ohio, and Ford is located in Dearborn, Mich.
The asbestos complaints would often list every location the plaintiff had ever worked as a location of possible exposure. Often, the complaints would identify a possible source of exposure by location only if it was Philadelphia or another Pennsylvania city. Given the corporate locations, ICLE states it is unlikely that venue was moved to Philadelphia in most or any of the cases at the defendants' behest.
Tort attorney Max Kennerly, of Philadelphia's Beasley firm, has a different take of the ICLE study. He said that the research is erroneous.
"Philadelphia is the home to so many asbestos cases for two reasons," Kennerly said. "First, the Philadelphia Navy Shipyard employed over 40,000 workers during WWII, and so was the primary location where these plaintiffs were exposed to asbestos."
He noted that the study does not mention the role of the Philadelphia Navy Shipyard in asbestos litigation and excludes asbestos in tabulating "plaintiff injury location."
He also said that "more than a decade ago the federal MDL judicial panel created the largest asbestos MDL in the federal courts in Philadelphia. Philadelphia state courts are thus often the most convenient forum for many asbestos defendants because they have already coordinated their defense teams to handle the federal cases in Philadelphia.
"Ninety-five percent of the report's numbers come from hormone therapy, denture adhesive, and Paxil cases, cases which allege negligence by Wyeth and GlaxoSmithKline, both of which have their pharmaceutical divisions headquartered in the area," he said.
"If these companies didn't have their 'nerve center' in Pennsylvania, they would have removed the cases to federal court under the Supreme Court's Hertz Corp. v. Friend opinion."
He maintains that "generally, it doesn't make sense to focus on the plaintiff's home for the consolidation of mass torts cases because mass torts victims are spread out all over the country.
"The whole point of consolidation is to avoid overburdening courts across the country with cases that involve common issues...When we as a society consider how mass torts cases should be resolved, one important issue is the efficiency of the court systems involved, and few dispute that Philadelphia is one of the most efficient court systems in the country."
A 2004 study performed by the National Center for State Courts (NCSC) did indeed praise Philadelphia's courts for efficiency. However, that study was commissioned by the First Judicial District of Pennsylvania - which is the Philadelphia courts.
According to NCSC, this efficiency is responsible for the migration of cases to Philadelphia. It is not because of plaintiff bias, but because the cases will be disposed of quickly, the NCSC study states.
The NCSC study essentially was a commentary of the speed with which cases are processed in Philadelphia, not a discernment of any trends in verdicts or bias in procedures..
"...the Civil Section has undertaken an impressive effort to eliminate its case backlog and improve the flow of cases. This effort has met with considerable success in reducing the size of its pending civil inventory and the age of cases at disposition."
A third source, the Department of Justice's Bureau of Justice Statistics (BJS), seems to sustain what the ICLE study says. This was a survey of tort bench and jury trials for 2005.
According to the study, Philadelphia had 539 trials of all torts in 2005. Plaintiffs (308) were the winners in 57.5% of those trials.
At 308 plaintiff victories, the city was ranked number one among the 75 most populous counties.
Of the 75 most populous counties surveyed by BJS, Philadelphia had the second highest number of civil trials in state courts with litigants seeking punitive damages (608) and the second highest number of plaintiff winners (357).
Cases in which the plaintiff claimed medical malpractice were most often disposed of by juries (99%). This was followed by asbestos litigation (95%).