Since expanding the scope of its annual report to include the New Jersey Legislature rather than only courts, a group known for designating what it sees as pro-plaintiff jurisdictions as "hellholes" has again included the Trenton lawmaking body on its list.

The American Tort Reform Association's "Judicial Hellholes" report included New Jersey's legislature for the first time last year, and in this year's installment, released Monday, it ranks No. 10—because of legislative measures implicating arbitration and other business issues.

"In 2019, the New Jersey Legislature distinguished itself as one of the most plaintiff-friendly legislatures in the country. While the Judicial Hellholes report typically focuses on the courts, the New Jersey Legislature is an exception because of its drastic liability-expanding agenda. The legislature enacted a so-called 'Wage Theft' bill with excessive penalties and advanced its attack on arbitration," ATRA says in the 2019-20 report.

The wage-theft law, which Gov. Phil Murphy signed last August, increased the filing period of such civil actions to six years, among other changes. ATRA said the law "threatens businesses with excessive penalties in order to extract concessions from good-faith employers, forcing them to choose between protecting their business or defending their rights in court."

ATRA also sizes up S-121, a measure signed into law in March that renders unenforceable any employment contract "that waives any substantive or procedural right or remedy relating to a claim of discrimination, retaliation, or harassment," and also provides that "no right or remedy under the Law Against Discrimination or any other statute or case law may be prospectively waived." The report calls the law "dangerous," noting that a lawsuit filed in federal court is challenging the law, claiming it is preempted by the Federal Arbitration Act.

Other legislative measures concerning arbitration, which are still pending, also are singled out in the report: S-2996, which concerns customer arbitration agreements, and A-4972, which seeks to regulate arbitrators. The latter "misses the point of consumer arbitration: to give parties the opportunity to resolve disputes more efficiently, fairly, and at less cost than litigation," ATRA says.

The report also criticizes lawmakers for pending measure S-4204, which seeks to address misclassification of workers as independent contractors.

Spokesmen for legislative leaders from both parties didn't respond to invitations for comment on ATRA's report.

The New Jersey Association for Justice—the state's primary organization representing the plaintiffs bar—didn't immediately offer a response to ATRA's report.

The legislature ranked No. 7 on a list of nine "hellholes" in ATRA's report a year ago.

Risperdal Verdict Vaults Philadelphia Court

Topping ATRA's hellholes list this year is one of New Jersey's neighbors to the west: The Philadelphia Court of Common Pleas, where a jury earlier this year awarded an $8 billion verdict against Johnson & Johnson.

That Oct. 8 verdict, plus a flood of other mass torts, prompted ATRA to replace California with Philadelphia's court as the worst venue in which to get sued, said Sherman "Tiger" Joyce, ATRA's president. He said the Philadelphia Court of Common Pleas last topped the list nearly a decade ago due to some of the same concerns, including "flooding of class actions and a lot of major pharmaceutical and asbestos litigation."

"There were different variations of the same theme, but basically the court serving as the home for seemingly litigation from all around the country in mass torts," he said. "It's styled itself as a specialty court, and, as we point out in the report, well over 80% in some of the key litigation areas are coming from out of state."

At No. 2 and No. 3, California and the city of New York continued to make the report's list. New entrants to this year's list include Georgia and Oklahoma. Many of the cases cited involved pharmaceuticals or other products made by Johnson & Johnson.

"This report is simply the latest effort to evade responsibility for negligent and dangerous corporate behavior," wrote Peter Knudsen, a spokesman for the American Association for Justice in an email. "This year's offering seems to focus on protecting Johnson & Johnson's cover-up of the asbestos-contaminated talc found in its baby powder and providing cover for the opioid industry responsible for the scourge of addiction and deaths afflicting communities across America."

The $8 billion verdict in Philadelphia came in one of about 7,000 cases alleging the anti-psychotic drug Risperdal, prescribed to treat autism, caused boys to grow breasts. According to the report, Risperdal lawsuits make up two-thirds of the caseload in the Philadelphia Court of Common Pleas.

The report noted Johnson & Johnson's Janssen Pharmaceuticals, the defendant, unsuccessfully moved to recuse the judge in the case after he high-fived some of the jurors.

Another 2,000 lawsuits were pending in the Philadelphia court against Johnson & Johnson and Bayer over the blood thinner Xarelto. Plaintiffs from outside Pennsylvania made up 84% of those cases, the report says.

In 2019, both companies reached a $775 million global settlement. Other big torts include pelvic mesh and asbestos.

"Mass tort cases have inundated the Philadelphia Court of Common Pleas due to judges' loose application of venue laws, a reputation for high jury verdicts, and an overall lack of legal reform," the report says.

Thomas Sheridan, president of the Philadelphia Trial Lawyers Association, called the report's "hellhole" designation a "complete fabrication."

"The only reason that Big Pharma, insurance companies, and huge multinational corporations attack Philadelphia courts is because Philadelphia is one of the few places left where the whole system isn't rigged in their favor," he wrote in an email. "The truth is that the Philadelphia courts are among the most efficient and balanced courts in the country, where cases are heard on time and the judges are exemplary."

The Pennsylvania Supreme Court, which reinstated thousands of Risperdal cases this year, was one of the venues to watch, the report says, because it was considering several "liability-expanding decisions." One of those cases is whether the U.S. Supreme Court's Bristol-Myers Squibb v. Superior Court of California ruling applies in a jurisdictional fight over pelvic mesh cases in Philadelphia.

California, where Monsanto Co., owned by Bayer, lost $2 billion and $80 million verdicts in cases alleging its herbicide Roundup caused non-Hodgkin lymphoma, continued to rank high on the list. The report also cited lawsuits brought under Proposition 65, its reputation as a "magnet for class action lawsuits" and anti-arbitration measures. Among the most notable was the California Supreme Court's 2018 decision in Dynamex Operations West v. Superior Court, after which "the flood gates opened, inundating employers with wage and hour lawsuits by individuals who were viewed as independent contractors," the report says. The California legislature codified the decision into law this year, particularly targeting gig economy companies like Uber and Lyft.

"It's not like California's that much improved," Joyce said.

New York stayed on the list with the report noting a $325 million punitive damages verdict this year against Johnson & Johnson over its talcum powder products.

New Venues

The new venues on the list included Georgia, due to its "dramatic expansion of premises liability and nuclear jury verdicts," primarily in premises liability and medical liability. The report specifically mentioned a $280 million verdict this year in a trucking accident case.

"Georgia has moved in focus for us in recent years," Joyce said. "ATRA is interested in legislative reforms, and we're hoping the report will help to be a catalyst for positive reform."

Another new venue was Oklahoma, where a state court judge issued a $572 million judgment, later reduced to $465 million, in the first trial over the opioid crisis. Oklahoma Attorney General Mike Hunter, a Republican, had brought the state's case against Johnson & Johnson on the theory that the manufacturer of opiate pharmaceuticals had created a public nuisance in the state.

"The AG, who's a Republican, took a very different view of public nuisance and the role of the state and bringing litigation when it came to climate change," Joyce said.

The report downgraded Florida, which ranked No. 1 in 2017, to the "watch list" after Republican Gov. Ron DeSantis created a "sea change" by appointing several new justices to the Florida Supreme Court. The new court reversed its stance on the rules of evidence, adopting the federal Daubert standard.

The report highlighted some of the same trends as a year ago, such as the use of "junk science" at trials, class actions over food packaging and attorneys general who have brought cases over opioids and climate change, many using outside law firms. Those cases, asserting an "expansive view of public nuisance law," also include cities and counties suing for their own damages.

Other trends in 2019 were legislation to ban arbitration in employment cases and new data privacy laws, like Illinois' Biometrics Information Privacy Act, the subject of the U.S. Court of Appeals for the Ninth Circuit's decision affirming certification of a class action this year against Facebook. Three Illinois counties—Cook, Madison and St. Clair—ranked No. 7 on the list in part due to the law, which the report called a "goldmine for the plaintiffs' bar."

California also enforces its Consumer Privacy Act on Jan. 1, which the report called "the most radical privacy law in the country," and the New York Privacy Act is in the works.

"We see this as an area of litigation that is just beginning to be tapped by the plaintiffs' bar," Joyce said.