Are Minority Jurisdictions “Judicial Hellholes”?

Four days before Christmas in 1999, 12 jurors in tiny Jefferson County, Mississippi, made national headlines when they slapped a drug company with a $150 million judgement for injuries that its diet drug fen-phen caused to five local citizens.

The headlines, though, weren’t about the behavior of American Home Products (now Wyeth), which knew its product was dangerous but aggressively marketed it anyway. (Fen-phen has killed several hundred people and injured an estimated 45,000 others.)

Instead, the news was all about how a group of poor, uneducated jurors in the South had helped a few gold-digger plaintiffs hit the “jackpot” at the expense of a deep-pocketed corporation. The verdict catalyzed the business community, which went on to launch a multi-million lobbying and PR campaign in Mississippi to make sure such verdicts became a thing of the past.

Reporters took the bait and flocked to Mississippi to tell the story of the nation’s most generous jurors. In November 2002, viewers of the TV news magazine 60 Minutes learned that tiny Fayette, in Jefferson County, was a place where “plaintiffs’ lawyers have found that juries in rural, impoverished places can be mighty sympathetic when one of their own goes up against a big, rich, multinational corporation.” In the story, Morley Safer interviewed a local florist who had received a multi-million-dollar settlement in a fen-phen lawsuit. The unnamed florist alleged that trial lawyers were bribing jurors to give big awards. “The jury awarded these people this money because they felt as if they were going to get a cut off of it,” he told Safer. Beyond that anonymous comment, the show that bills itself as TV journalism’s most respected news organization offered no other evidence about payoffs to jurors.

During the broadcast, Safer interviewed Wyatt Emmerich, a newspaper publisher in Jackson, who explained a few big verdicts there by saying, “Look at the jurors. These are disenfranchised people. These are people who’ve been left out of the system, who feel like, ‘Hey, stick it to the Yankee companies. Stick it to the insurance companies. Stick it to the pharmaceutical companies.’ The African Americans feel like it’s payback for disenfranchisement. And the rednecks, shall we say, it’s like, ‘Hey, you know, revenge for the Civil War.’ So there’s a lot of resentment, a lot of class anger, a lot of racial anger. And it’s very easy to weave this racial conflict and this class conflict into a big pot of money for the attorneys.”

At the time of the episode, the U.S. Chamber of Commerce was spending $100,000 on an advertising campaign in Mississippi to push for a cap on damages in lawsuits against corporations, and it had been sued by the state for improperly giving money to judicial elections. Nationally, the Chamber’s Institute for Legal Reform had also committed to spend $60 million lobbying for restrictions on citizens’ rights to sue. Those facts weren’t included in the story. Meanwhile, the florist, Beau Strittman, went public and retracted his comments about the payoffs, saying, “I just said it as a joking statement.” CBS spokesman Kevin Tedesco said the network could not comment on the fallout of the segment because several jurors have sued CBS for libel over the broadcast.

Nonetheless, the day after the program aired, the legislature passed new restrictions on lawsuits, and shortly afterwards, the FBI launched an investigation into the charges of jury corruption. That investigation thus far has not resulted in the prosecution of any jurors or lawyers, but in early September, 12 people were arrested for allegedly filing false claims to the fen-phen trust fund, which was set up after the jury verdict to compensate hundreds of people injured by the diet drug.

The 60 Minutes episode hewed carefully to the media strategy of the tort reformers by reviving the old canard that poor and minority jurors are overly generous to plaintiffs—a phenomenon often called the “Bronx effect.” The term was coined back in 1987, when author Tom Wolfe, in his novel The Bonfire of the Vanities, described a plaintiffs’ lawyer who files malpractice claims in the Bronx rather than in Westchester County because he believes that the poor, minority Bronx juries were a “vehicle for redistributing the wealth.”

The legend of a Bronx effect has lived on, although the allegedly pro-plaintiff venues tend to change with the political winds. After the Bronx, there was “The Bank,” a heavily minority county in Los Angeles. Then there was Alabama, where in 1999, jurors in mostly black Hale County hit the Whirlpool Financial National Bank (now Transamerica Bank) with a $581 million verdict for a scheme to defraud elderly and illiterate people on satellite dish sales. And now, thank to the fen-phen verdict, Mississippi is the favorite plaintiffs’ paradise, particularly Jefferson County, which has the highest percentage of black residents and the highest unemployment rate in the state.

Legend notwithstanding, there’s not much empirical evidence that poor black jurisdictions routinely dole out big awards to plaintiffs. In 2002, Cornell law professor Theodore Eisenberg did an empirical study to see whether demographics actually corresponded to jury verdicts. He found that large black populations actually correlated negatively with award levels—i.e., jury awards were lower in areas with lots of African Americans. Duke law school professor Neil Vidmar undertook a similar study in the Bronx and found no statistically significant evidence that jurors in the heavily minority borough were more generous or more pro-plaintiff than in neighboring jurisdictions.

In Hale County, Alabama, the 1999 verdict against Whirlpool was hardly a trend. According to lawyer Tom Methvin, who litigated the case, the county hadn’t seen a verdict bigger than $200,000 in 150 years. The Whirlpool case just happened to be particularly egregious.

Salespeople from Whirlpool, some of whom were convicted criminals, went door to door in the state selling satellite dishes to elderly and illiterate customers for $1,100. The purchases were financed on bogus “Whirlpool” credit cards that carried 22 percent interest rates and an unlimited number of payments—facts that the company didn’t disclose. The same equipment could have been purchased in a retail store for $199. The company bilked consumers out of millions of dollars through the scheme. “On the right set of facts, the juries get upset,” Methvin says. “They were just tired of being oppressed by these big companies taking advantage of them.”

David Stout, the former head of the New Mexico trial lawyers’ association, says that critics of juries in poor places tend to forget that “big money” is a relative term. “There is a school of thought that people from a poor background think $100,000 is a lot of money," and for that reason, some trial lawyers don’t want them on juries where they are aiming for damages in the nine-figure range.

Nonetheless, the idea that poor, minority jurisdictions are hostile to business is actively encouraged by groups like the U.S. Chamber of Commerce and the American Tort Reform Association (ATRA) In 2003 ATRA published a study, Bringing Justice to Judicial Hellholes, identifying jurisdictions its members consider “judicial hellholes” because they are “very plaintiff-friendly.” Among the 2003 “hellholes” were all the heavily African-American counties in Mississippi, two mostly Latino counties in Texas, the heavily Latino Miami-Dade county in Florida, and the mostly black Orleans Parish in Louisiana.

Earlier this year, the Center for Justice and Democracy (CJD), the nation’s only anti-tort reform advocacy group, published an analysis of Bringing Justice to Judicial Hellholes. Noting that the hellholes are not selected on any empirical basis (but rather by a survey of ATRA’s membership), CJD compared the 12 jurisdictions to census data. Of the 12, nine are in predominantly minority areas, and all but one are areas that have larger minority areas than the rest of the state they are located in. The U.S. Chamber of Commerce has likewise released an annual survey on state litigation climates and of the 18 jurisdictions identified as problematic, 15 are predominantly minority—including Mississippi’s Jefferson County, featured on 60 Minutes.

Despite the obvious racial undertones to the hellholes study, it has been cited authoritatively over the past two years by the Chicago Tribune, St. Louis Post-Dispatch (which put it on the front page), Los Angeles Times, Philadelphia Daily News, New Orleans Times Picayune, Dallas Morning News, Forbes, Business Week, Wall Street Journal, Washington Times, and USA Today. (None, incidentally, covered the CJD report.) The stories, especially those in a host of smaller news outlets, tend to quote civic leaders like Emmerich wringing their hands over their standing on the list and demanding that the legislature take action by passing restrictions on lawsuits.

Rarely do they take a more nuanced approach to exploring why the verdicts were so large in the first place. As Methvin suggests, Southern states like Alabama, where one in six residents is functionally illiterate, are fertile grounds for bad actors looking to make a buck. In Alabama, he says, weak consumer protection laws mean that the only recourse people have against fraud is a lawsuit.

Indeed, the Whirlpool verdict and ensuing publicity prompted Alabama state legislators to pass strict caps on punitive damage awards to make sure juries could never get so carried away again. Meanwhile, those same legislators did nothing, though, to prevent finance companies from perpetrating fraud on unwitting consumers the way Whirlpool and eight other out-of-state finance companies had done in the satellite dish scam.

Methvin says that there are also flip sides to these stories about the judicial hellholes, like the counties where “you couldn’t get a dime if the pope was run over by a drunk driver.”

According to the U.S. Bureau of Justice Statistics (BJS), many of those types of jurisdictions do exist—such as the entire state of Massachusetts, where in the three largest counties, BJS reports that plaintiffs won only 29 percent of cases that went to trial. (In Worcester County, plaintiffs won only 19 percent of trials.) Or take Lancaster, Pennsylvania, where state court data reveals that out of 17 trials in medical malpractice cases between January 2000 and July 2003, plaintiffs won exactly zero. Nearby Philadelphia, meanwhile, is tagged as a “hellhole” by ATRA for being too plaintiff-friendly. But according to BJS, Philadelphia jury verdicts in 2001 were split right down the middle between defense and plaintiffs.

Indeed, many of the “hellholes” identified by ATRA don’t appear all that friendly to plaintiffs when more closely examined. ATRA cites several counties in Texas as hellholes, which is hard to fathom given the radical changes in the state tort law last year, which severely limited citizens’ rights to sue, as well as the hard-right conservatives that dominate the state’s appellate courts. In the largest counties in Texas, plaintiffs won at trial only 45 percent of the time in 2001, according to BJS data. The Houston Chronicle reported recently that in 2002, the median award in Texas was $25,000, compared with $41,894 in the nation as a whole.

Meanwhile, Stout finds the presence of New Mexico in the ATRA “hellhole” report puzzling, because, he says, “We had tort reform in the 1970s,” he says. “For us to even be on the chart of the tort reform movement is really silly.”

—Stephanie Mencimer