NEW YORK (CNN/Money) -
Illinois is either heaven or hell, depending on how you look at it.
Madison County and neighboring St. Clair County, two southern Illinois counties with populations of no more than 260,000 each, took the No. 1 and No. 2 spots as the worst places for companies to be hauled into court, according to a report released Wednesday by a tort reform advocacy group.
On the other hand, if you are looking to sue a business for doing you wrong, then Madison and St. Clair counties might be the place to go.
For the second year running, Madison took top honors in the "Judicial Hellholes" survey conducted by the Washington-based American Tort Reform Association (ATRA). The study looks at how corporations view their treatment by select state courts.
Given that the survey addresses corporate views, it is hardly scientific or unbiased. And trial lawyers say the study misrepresents crucial facts about the lawsuits brought and the results that ATRA considers outlandish.
Madison "sunk to even lower depths" in 2004, according to ATRA. As evidence, the association points to a class action filed in June that accuses Wal-Mart Stores (Research) and Kmart (Research) of breaking the law by refusing to refund $1.39 and 52 cents left, respectively, on company gift cards.
Madison County "is a place where eating a bad piece of chicken in a local restaurant leads to a lawsuit for thousands of dollars," states ATRA.
St. Clair isn't far behind in the group's mind. The county was named a judicial monster for the first time thanks to a spike, to 24 from 2, in the number of class actions being waged there. The defendants include such household names as Home Depot (Research), Bank of America (Research), Hewlett-Packard (Research) and Hasbro (Research).
The goal of the report, said ATRA president Sherman Joyce, is to help foster fair treatment at courts around the country. "This report really focuses on the most egregious problems," he said.
And what makes places like Illinois and South Carolina stand out, added Joyce, are provisions allowing almost anyone to sue there. Accusers and accused don't need to reside in these states, nor does the underlying injury have to occur there.
The report -- sure to be embraced by litigation reform advocates and derided by trial lawyers -- comes at a crucial time.
A weapon in the battle to come?
President Bush has made it clear that tort reform, which refers to civil lawsuits brought by individuals claiming injury, will be a top legislative priority in his second term. Bush singled out medical malpractice cases, which reform advocates say are driving up health care costs and driving doctors out of business.
|There's only one "judicial hellhole" west of Texas: Los Angeles, ranked last at No. 9.
With Republicans firmly in control of Congress and various state legislatures around the country, tort reform advocates are optimistic that key initiatives they support will become law.
In its "Judicial Hellholes" report, ATRA applauds recent state election results and other events in Illinois, California, West Virginia and elsewhere that seem to bode well for its agenda.
But tort reform critics, led by trial lawyers, dismiss calls for an overhaul on the grounds that the judicial system is far from broken.
They point to studies showing that mammoth court awards are the exception, not the rule. They also note that payouts often are less than the verdict because judges frequently reduce the amounts, or the cases are settled for less because accusers want to end the litigation quickly and court awards give them the bargaining tool they need.
In one study published in March, law professors from Cornell University and New York University found that the cost of class actions, as measured by settlement amounts and the fees paid to the lawyers who file them, has remained flat over the last decade. Those findings suggest that claims of a court system run amok in the U.S. are overblown.
Kevin Conway, the president of the Illinois Trial Lawyers Association, called the ATRA report "alarming" and said it is an attack by companies upset because they've been caught breaking the law. "The truth comes out in some place and then it becomes a 'judicial hellhole,'" said Conway, a Chicago lawyer.
"Winners" & "Losers"
Of the nine "Judicial Hellholes" and four runners-up that made ATRA's list this year, most are repeat offenders. But there were a few surprises.
- Long known as the "lawsuit capital of the world," Mississippi is off the hellhole list in 2004. ATRA cites an extensive effort by state legislators, voters and judges to rein in jury awards, including the reversal of a $36 million verdict that grew out of a dispute over $638 in unearned life insurance premiums.
- Hampton Co., S.C. got a promotion this year, from "dishonorable mention" to Hellhole No. 3. ATRA cites a 43 percent increase in the number of lawsuits filed compared to six years ago. The main culprit, says ATRA: forum shopping, a taboo move lawyers use to get their cases heard by judges they think will be sympathetic to their clients.
- Texas, another infamous trouble spot for corporate defendants, enacted sweeping civil justice reform this year that went a long way toward placating ATRA. Of the three counties that made the 2003 ranking, only Jefferson Co. survives. Why? A $1 billion verdict earlier this year to a single family claiming injury from the Fen-Phen diet pill scandal. ATRA calls Fen-Phen litigation "the new gravy-train" for county lawyers.
- ATRA derides West Virginia, the only entire state to qualify as a hellhole, for "taking employment protection to a whole new low." ATRA claims the state's high court held in April that a local company could not fire its safety director for on-the-job cocaine use because his contract allowed dismissal only for dishonesty.