1 Civil Justice Study April 2015 Litigation Imbalance III Madison County Strikes Back Revealing Trends in Court Dockets Demonstrate Lawsuit Abuse in Select Counties A Study Conducted By:
2 About the Litigation Imbalance Reports I & II In the fall of 2005, the Illinois Civil Justice League undertook a comprehensive look at Illinois case filings for ten years ( ), representing (to our knowledge) the most complete look at levels of litigation in Illinois. The results showed many different trends in county caseloads in Illinois, including a disturbing geographic trend of litigation explosion in Cook County. Additionally, quantitative case filing data in magnet counties such as Madison and St. Clair counties mirrored studies from other organizations, including the American Tort Reform Association s Judicial Hellholes reports, showing Litigation Index scores nearly four times the median county average. Four years later, ICJL researchers updated data from and traced the case filing history from , providing a 41-year depiction of how civil filing caseloads in Illinois have developed over time and geography, with totals re-calculated to include changes in population trends, as well. The result was indisputably the most comprehensive quantitative study of the Illinois civil justice system. All numbers continue to be taken directly from the Caseload and Statistical Records as collected annually by the Illinois Supreme Court. Records dating to the mid-1960s are available in the Supreme Court Law Library in Springfield, and -- from available online. Notable patterns emerged from the 2009 study of the Litigation Imbalance in Illinois. The data showed these revealing patterns in regards to the filing patterns among county dockets in Illinois. The greatest of these patterns showed that the major civil case filings in Madison County, which topped out in 2003 at 2,102 cases filed and bottomed in 2007 at 1,091 cases, were trending upward, fueled by non-illinois plaintiffs. The data showing that 90 percent of all asbestos cases were from out-of-state plaintiffs has been repeated countless times in the past 5 years. This study added to insight from the 2005 study, which explained the extraordinary venue issues in Cook County. Cook County, which in 1994 represented 44 percent of the state s population and only 46.6 percent of the state s major civil litigation, now a decade later occupied 43 percent of the state s population, but a staggering 63.6 percent of the litigation. In fact, the disparity in the major civil case filings between Cook County and Outside Cook are so disproportionate, to rebalance the 2003 major civil case filings one would have to remove 7,560 major civil cases from Cook County and redistribute them among 95 other counties. About the Illinois Civil Justice League The Illinois Civil Justice League is a coalition of Illinois citizens, small and large businesses, associations, professional societies, not-for-profit organizations and local governments that have joined together to work for fairness in the Illinois civil justice system. Created in late 1992, the League currently represents more than 500,000 Illinois residents directly, and additional hundreds of thousands indirectly. Members and supporters include many of the major business and professional associations and societies in Illinois.
3 Litigation Imbalance III Executive Summary This most recent look at major civil case filing numbers updates Illinois caseload statistics for major civil litigation (Law Division) filings by an additional six years, from 2008 to 2013, and from the 2005 & 2009 Litigation Imbalance studies. Disturbingly, as the statewide and downstate numbers are flat for Illinois as a whole, Madison County has again regained its intensity, reaching 2,206 cases filed in 2013 equal to the highest filing rate since the court changed reporting procedures in the mid-1990s. The 2013 filing rate represents a 50 percent increase from the average of the previous ten years. Not shocking is the fact that the Madison County filings would be minimal and fit within statistical averages if not for the hundreds of additional asbestos filings, few of which have any connection to the county or even the State of Illinois. Additionally, the imbalance in case filings between Cook, Madison and St. Clair County the counties most cited by national studies regarding lawsuit abuse and the other ninety-nine counties in Illinois continues to widen. To explain, the number of Illinois counties with filing rate less than one lawsuit per thousand persons the Illinois Civil Justice League calls this the Litigation Index of 1.000, Litigation Index = cases filed * 1000/population has expanded from just 24 counties in 1998 to more than half of Illinois at 59 counties. The Litigation Index score of the 99 counties not named Madison, Cook or St. Clair was in 2013, the lowest score in 41 years. The lawsuit landscape in Illinois shows great improvement in the Second, Third and Fourth appellate districts, as well as improvement in portions of the Fifth District. A Litigation Triangle among the counties of Jackson (Murphysboro/Carbondale), Jefferson (Mt. Vernon) and Williamson (Marion) counties shows above average litigation filing rates that are all above two lawsuits per thousand persons, as well as the traditionally-recognized lawsuit havens of Madison & St. Clair counties in the metro-east St. Louis area and the perpetually lawsuit-oriented Cook County. Looking at Cook County, a review of the past 21 years of reported verdict totals shows that plaintiff verdicts were four times greater an average of almost $1 million than the surrounding four counties of DuPage, Kane, Lake and Will. That is despite the fact that the surrounding counties plaintiffs were successful at a five percent greater rate in reported cases. The pariah of Illinois litigation continues to be Madison County, where lawsuit filings average per thousand persons double the rate of Cook County, triple the rate of St. Clair County, and six and a half times the rate of the other 99 counties in Illinois. At 1,678 filed asbestos cases in 2013, Madison County likely handles one-third to one-half of all asbestos-related cases filed in the United States each year, and 168 times more per capita than Cook County. There is great secrecy surrounding the wealth exchanging hands through this docket, but with an estimated outcome of $2 million per case, the Madison County asbestos rocket docket could be worth more than $1.74 billion annually larger than the GDP of Belize and could produce nearly $600 million annually in contingency fees for plaintiffs attorneys.
4 Number of Counties Civil Justice System Shows General Improvement Pockets of Abuse The statewide major civil lawsuit filing numbers for the past decade show trends identical to the issues presented in our first two studies, with continuing aberrations in Cook and Madison counties, as well as minor flare-ups in several other counties. In fact, Madison, St. Clair and Cook counties drive the statewide Litigation Index numbers so much higher than the other ninety-nine Illinois counties, that in 2013 only two other counties beyond Cook and the metroeast saw numbers higher than the statewide average of lawsuits per thousand persons. Those two southern Illinois counties, Jackson (Carbondale) and Williamson (Marion), are not surprising, given the historical connections of plaintiff firms to the election of judges in those counties. However, 59 Illinois counties in 2013 saw Litigation Index rates below one lawsuit per thousand persons, representing a major improvement in the downstate Illinois landscape. In fact, the 2013 total represents a more than two-fold increase from the meager 24 counties with numbers below in Figure 1: Number of Illinois Counties with Litigation Index Less Than Number of Illinois Counties with Litigation Index < ( ) As demonstrated in Figure 1, the number of counties showing less than one lawsuit per thousand persons has grown substantially in the past five years (2009 to 2013) from 35 to 59. This positive trend shows a retreat in litigiousness in smaller, mostly rural counties throughout downstate Illinois. Looking at the Litigation Index for the 99 counties in Illinois not recognized in the past decade as Judicial Hellholes (namely, Cook, Madison and St. Clair counties), the cases filed per thousand persons in 2013 was only 1.260, the lowest score seen in 41 years. A look at these rates by Appellate and Circuit divisions demonstrates the dramatic difference in the filing rates. The rates in the First (Cook County) and Fifth (Madison and St. Clair counties) appellate districts are and 3.025, respectively, whereas the rates in the suburban Second and rural Third and Fourth districts are near the 99-county average at 1.254, and 1.121, respectively. The Fifth Appallette District rates are driven by filing rates in the Third Circuit District (which totals and includes Madison County), Twentieth (which totals and includes St. Clair County), and First circuits (which totals and includes Jackson and Williamson counties).
5 Figure 2: A Map of the 102 Illinois Counties Indicating 2009 Sub Litigation Index (Dark Blue), New 2013 Counties (Light Blue), and 2009 Counties That Now Exceed (Orange)
6 < Total Counties Percentage Litigation Index Score As shown in Figure 2 (map on page five), the counties with the ultra-low litigation rates are almost exclusively more rural counties, except for suburban Kendall County near Chicago. Figure 3: Counties with Less Than Litigation Index By Appellate District 1st Appellate 0 1 0% nd Appellate % rd Appellate % th Appellate % th Appellate % Again, and as demonstrated in Figure 3, the percentage of low-litigation counties by Appellate District is relatively even throughout the downstate Appellate districts, with the exception of heavier percentage within the Fourth Appellate District. Yet, as the statistical trend for low litigiousness in the Second, Third and Fourth appellate districts skews towards smaller, more rural counties, the Fifth District is evenly split between high-litigious and lowlitigious counties, almost exclusively divided by the five local circuits, and trending toward the rural, deep Southern Illinois counties in the First and Second circuits. Of the only six counties with above Litigation Index rates that are outside Cook, Madison and St. Clair counties, all six counties are in the First and Second circuits within the Fifth Appellate District, and include Williamson (2.824), Jackson (2.625), Franklin (2.449), Union (2.389), Saline (2.125) and Jefferson (2.044) counties. As demonstrated by the map in Figure 4, the disparity between above and sub counties in the Fifth District is centered on the metro-east area that includes Madison and St. Clair counties and the First and Second circuit Litigation Triangle area among Jackson (Carbondale), Williamson (Marion) and Jefferson (Mt. Vernon) counties. Additionally, the counties of Alexander, Pulaski and Gallatin have all had above Litigation Index rates at least once in the past four years. Figure 4: Fifth District Litigation Index scores with Above (Red) counties and Sub (Blue) counties There is a stark contrast between the sub areas within the rest of the Second Circuit, and the majority of the Fourth Circuit, and areas inside the First Circuit. An explanation for how Union County, population 17,583, can have a Litigation Index rate nearly two lawsuits per thousand persons higher than Johnson and Pope counties, combined population 16,989, is unexplainable yet perfectly describes the tale of two systems of civil justice in Illinois.
7 Cook County Lawsuit Rate Steadies, But More Than Double Its Neighbors Ten years ago, we detailed the massive difference between Cook County s population, which in 2013 was exactly 40.7 percent of Illinois, and its amount of major civil litigation caseload, which equaled 64.1 percent of all cases filed in Illinois. The numbers have changed little over the past decade, despite the fact that Cook County has received national attention regarding the disparity. As demonstrated in Figure 5, the caseload in Cook County is more than double the neighboring collar counties of DuPage, Lake, Kane, Kendall and Will. A closer examination of the numbers shows 2013 Litigation Index scores in the neighboring counties as 1.310, 1.390, 1.230, 0.980, and 1.503, respectively. Figure 5: Litigation Index Comparison of Cook County and Neighboring Collar Counties The inherent size and complexity of the Cook County civil justice system makes a closer study very challenging. With an annual filing average of nearly 21,000 cases per year in Cook County, the ability to quantify and track case outcomes over lengthy study periods world require large amount of resources. ICJL researchers evaluated the classifications of the first 3,500 cases filed in the first three months of 2006 in Cook County. Just more than one-third (34 percent) of the cases involved motor vehicle accidents, by far the largest category of cases, followed by contract dispute litigation (19 percent) premises liability claims (11 percent), and medical malpractice litigation (7 percent). The other 29 percent of cases included a multitude of classifications that each accounted for less than 2 percent of claims, including construction injuries, product liability cases, consumer fraud claims, petitions for subpoenas and discovery, legal and professional malpractice cases, asbestos and FELA actions, claims for property damage, breaches of warranty, retaliatory discharges, libel and slander actions, dram shop cases and other various statutory actions.
8 Certainly, many of the actions filed in Cook County involve residents of neighboring counties, business transactions facilitated by multiple parties across the metropolitan region, car accidents that occurred while driving to/from the metropolitan center of Chicago, and within a multicounty healthcare system. But the hallmark of any judicial system should be its consistency amongst multiple adjudicators under the same laws be it judges in different courtrooms, courtrooms within different courthouses, or courthouses between different judicial circuits and districts. In this case, Cook County just like Southern Illinois observes a dramatic difference in filing rates and case outcomes from its nearest judicial neighbors. There is no centralized database of civil justice outcomes in Illinois. However, the weekly Cook County Jury Verdict Reporter and its monthly companion, the Illinois Jury Verdict Reporter publishes a sample of reported case outcomes of Illinois verdicts. While this information, collected since 1959 by the Law Bulletin Publishing Company, is not a randomized sampling, it is the only centralized conglomeration of case statistics and historical outcome comparisons available in Illinois. A review of 21 years of outcomes by the Cook County Jury Verdict Reporter found verdict awards of $7.5 billion, with 5,733 cases won by the plaintiff, and 4,856 defense verdicts over the same time period, an average of $1,306,475 per verdict. Plaintiffs were successful in Cook County in 54 percent of the cases reported. Alternatively, in the cases reported to the Illinois Verdict Reporter for the collar counties of DuPage, Kane, Lake and Will, verdict awards of $617,408,155 an average of only $325,466 per verdict were reported in 1,897 plaintiff victories, with 1,305 reported defense verdicts, equaling a 59 percent plaintiff success rate. Figure 6: Average Plaintiffs Verdict in Cook County vs. Four Collar Counties $4,000,000 $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $0 Cook County Four "Collars"
9 In Cook County, the reported verdict statistics represent only 10,589 of 432,084 total cases filed (or 2.5 percent) in those 21 years. In the four collar counties, the verdict statistics represent only 3,202 of 94,425 total cases filed (or 3.4 percent) in the same time period. These percentages are approximate due to the fact that case filing data tabulated by the Administrative Office of the Illinois Courts (AOIC) represents the beginning of the docket, but the reported verdicts cases that could span from multiple months to more than a decade are reported at the conclusion. Figure 7: Case Statistics Cook vs. Collars from Plaintiff Defense Total Awards Avg Verdict Cook % $7,490,018,665 $1,306,475 Four Collars % $617,408,155 $325,466 So, despite the fact that judges and juries in the four collar counties of DuPage, Lake, Kane and Will, rule in favor of the plaintiff by a margin five percent greater 59 versus 54 percent the average award in Cook County from was almost $1 million per case more than the average in the surrounding counties. Although, the gap between Cook County and its neighbors regarding average plaintiff verdict amount has narrowed since (See Figure 6) The Illinois Verdict Reporter also includes annual tabulations for LaSalle, McHenry, Peoria and Winnebago counties, although the sample sizes are much smaller to show annualized trends. The average verdict amounts for LaSalle and Peoria counties, as shown in Figure 8, are significantly larger than the collar counties. However, more than half of the total awards over 21 years in LaSalle County was reported in just one cycle ($25,476,905 in ), and over two cycles ($17,114,255 in and $18,170,573 in ) in Peoria County. Figure 8: Case Statistics Select Downstate Counties from Plaintiff Defense Total Awards Avg Verdict LaSalle % $47,798,659 $692,734 McHenry % $19,229,610 $128,197 Peoria % $57,754,744 $825,068 Winnebago % $48,677,375 $331,139 Again, the ability to catalog even a small part of the outcomes of the Illinois civil justice system is nearly impossible. Settlement data, often the hardest data to procure, is not included in this verdict data. One must also assume that defense attorneys report successes at a near equal level to plaintiffs attorneys. However, this data set exists to advise attorneys in preparation for successful litigation or settlement negotiation. If it can be trusted to be an accurate reflection for the purpose of setting the market for litigation, it must be considered reliable enough for setting basic assumptions about the Illinois civil justice system.
10 Madison County Faces Historic Increase, Shatters Modern Records The Madison County Record on December 23, 2014 almost said it all: Madison County major civil cases at trial in 14 net $2.3 million in judgments. With only 21 law division trials, resulting in 15 plaintiffs verdicts that netted $2,367,125 in judgments, Madison County must be a shadow of its former self it would seem. To boot, two cases accounted for $1.9 million of the total. Plaintiffs attorneys have touted the few verdicts as proof that there is not a story in Lawsuit Capital of the World, and they would be very right, and very wrong. Nearly a decade ago, Madison County was enjoying a return to normalcy. With reforms correcting the imbalance of medical malpractice and class action cases, Madison County s major civil case filings were starting to return to a normal pace. There were only 528 non-asbestos cases filed in Madison County in 2013, giving it a Litigation Index score of If only the asbestos docket had not added another 1,678 cases. Figure 9: Comparison of Asbestos to Non-Asbestos Filings in Madison County Asbestos Cases Non-Asbestos Cases It s a long way from 1996, the year after major statewide reforms reduced the Madison County asbestos docket to only 65 cases. In 2006, nationwide attention to Madison County reduced the docket to a decade-low 325 cases. In 2007, the total case filing numbers, including asbestos, had deflated to nearly normal levels. The 2007 Madison County Litigation Index of cases per thousand residents had nearly lowered to the Cook County score of cases per thousand residents. In 2011, the non-
11 asbestos case filing total of 498 would have placed Madison County at cases per thousand persons and would have kept Madison County out of the Top 10 statewide if the asbestos docket was not factored into the totals. And, historically, Madison County never deviated from the Cook County trend line until the 1986 introduction of asbestos litigation. As displayed in Figure 10, Madison County clearly follows the Cook County trend line from the mid-1960s until While Cook and Madison counties handled caseloads nearly twice the size per capita as 99 other Illinois counties, the trend lines held steadily together for nearly 20 years. Prior to 1986, many credited the larger share of Madison County cases to the phenomenon of out-of-state cases dealing with accidents involving the river and rail transportation industries. In 1986, lawyers first started filing asbestos litigation in Madison County and pushed the case filings up by a record 1,506 cases in one year. That year, the Litigation Index hit cases per thousand residents, the largest score ever recorded in Illinois. The rush of filings subsided in the mid-1990s before the caseload began to expand nationally in the late-1990s. Figure 10: Litigation Index Comparison: Madison County vs. Cook County vs. Downstate Number of Lawsuit Filed Per Thousand Persons by Madison, Cook & St. Clair counties vs. 99 Other Illinois Counties Madison County Cook County Saint Clair County 99 Other Illinois Counties But, after the flurry of medical malpractice and national class action filing abuse in the late-90s and early-2000s, Madison County again trended back towards the Cook County level. The success of the Madison County reforms to the medical malpractice and class action dockets has been substantial especially considering the Litigation Index disparity between Madison and Cook counties had been as high as 3.6 cases per thousand in Under the direction of then-madison County Chief Judge Ann Callis, the Madison County courts adopted mandatory mediation for all medical malpractice claims, tightened pro hac vice requirements for out-of-state attorneys, and ended the practice of striking unfavorable judges through the liberal use of substitutions by multiple class action plaintiffs.
12 As a result (and displayed in Figure 11), the Litigation Index difference between Madison and Cook counties dropped dramatically between 2003 and 2007, but has surged back to a modern high. A more accurate representation of this increase can be stated simply: the number of cases filed per thousand Madison County residents has increased by more than four cases per thousand persons in the past six years, with a year-to-year jump between 2011 and 2012 of 2.4 cases per thousand residents. Figure 11: Litigation Index Comparison: Madison County vs. Cook County Year Madison Cook Difference Year Madison Cook Difference While that jump might not quite compare to the increase seen between 1985 and 1986 the year that the Madison County court system discovered its addiction to asbestos litigation, the recent surge is historically-significant in modern terms, as the court changed its definitional threshold of what constitutes a Law Division case in 1995 from above $30,000 to above $50,000. Quite simply, if Cook County s law division filing rate had risen by four cases per thousand persons in the past six years, that increase would amount to 20,963 new cases (incidentally, the total number of Cook County major civil case filings in 2013 was 21,035). According to the Madison County Record s analysis of the 2013 asbestos docket, one New York plaintiffs firm filed the most cases, numbering 525 in Two other firms accounted for another 575 cases between them, according to the Record. The Record estimated that more than 1,000 cases were mesothelioma cases and 650 were lung cancer cases, an area of the Madison County docket that is growing. Figure 12: Distribution of Madison County Asbestos Suits Filed by Out-of-State vs. Illinois vs. Madison County Plaintiffs (Source: Madison County Record) Out-of-State Plaintiffs Illinois Plaintiffs As shown in Figure 12, an ICJL study of asbestos cases demonstrated that only 1 percent of Madison County asbestos cases involved a Madison County plaintiff, Madison County Plaintiffs
13 and that only 10 percent of asbestos claims involved plaintiffs from Illinois. That statistic was reaffirmed by the Madison County Record in December 2014 when it found only two Madison County plaintiffs out of 207 cases in a trial setting, and 20 other plaintiffs hailed from within Illinois. A January 2015 Record editorial stated that only nine percent of 2014 Madison County asbestos cases were filed by Illinois residents, and that less than one percent were filed by actual Madison County residents. The ICJL analysis of 469 Madison County asbestos plaintiffs found that they were residents or workers exposed to asbestos in 40 different states and one foreign country. The Madison County Record analysis of 2014 cases found claims originating from plaintiffs in Australia, Nova Scotia and Puerto Rico. Figure 13: Comparison of Cook & Madison County Population vs. Asbestos Suits According to a 2013 US Chamber Institute for Legal Reform study, Cook County averaged just 96 annual mesothelioma claims from and 119 annual claims from , despite having a population that is nearly twenty times larger than Madison County. During the same period, the Madison County courthouse averaged 1,021 lawsuits per year, which equaled lawsuits per thousand persons. The 119 annual claims in Cook County equaled lawsuits per thousand persons. Therefore, Madison County averaged 168 times more asbestos suits per capita from than Cook County. Recently, a May 2014 article from the Madison County Record indicated that asbestos defendants have won nine straight verdicts since However, three trials between 2000 and 2003 resulted in plaintiffs verdicts of $16 million, $34 million, and $250 million the latter representing the largest asbestos verdict for a single claimant in American history, brought on behalf of an Indiana resident with mesothelioma. The case was later settled for a smaller amount in order to avoid an overturning of the verdict on appeal. In 2007, it took less than two hours for jurors to reject a $6 million claim. A subsequent claim that year, asking for $6 million to $29 million in compensation, was tried under Missouri law instead of Illinois law, which uses the Lipke Rule that bars evidence that a plaintiff might have been exposed by other sources than those alleged against the defendant. Another 2010 trial, which resulted in a defense verdict for Georgia Pacific, applied Kansas law, due to the out-ofstate status of the plaintiff. The Lipke Rule is one of several Illinois laws that stack the deck against defendants in Madison County. Recently, Governor Pat Quinn and the trial-lawyer-dominated Illinois General Assembly passed several lame-duck-session gifts on behalf of the Illinois Trial Lawyers Association, including the removal of the statute of limitations on asbestos claims, the expansion of possible negligent parties for asbestos cases to include supervising
14 architects, design engineers and public school boards, and the reduction of civil juries to just six jurors. The latter reform is likely to have a major effect in Madison County, where jurors have started to identify venue abuse from out-of-state plaintiffs, such as was the case in a 2010 trial: Manuel Sanchez, defense attorney with Sanchez, Daniels & Hoffman in Chicago, represented Ford Motor Company in a 2010 asbestos trial. He explained that during the trial, one juror asked where Bloomingdale, Ill. the residence of the claimant was located and later followed with curiosity as to why the case was then tried in Madison County. He said that such probing from jurors is proof they are aware of the county s reputation. The jury legislation passes an unfunded mandate upon Illinois counties in the form of an increase in juror pay, tripling the cost of juries in Cook County from $3.1 million to an estimated $9.5 million. According to the Chicago Tribune, Lake County taxpayers will have to generate $500,000 more for jurors and Will County will need $300,000 more. Major news outlets called the new law a parting gift and Christmas present for Illinois trial lawyers. So, the Madison County rocket docket which has birthed more than 15,000 asbestos cases since the early-1990s continues to dominate the national scene. One Madison County-based asbestos firm s website claims that only two to three thousand mesothelioma cases are annually diagnosed in the United States, meaning the Madison County courthouse likely handles approximately one-third to one-half of all cases filed annually in the United States. And, because of the secrecy of settlements in Illinois litigation, the public likely only knows the result of 12 of the past 12,000 asbestos cases filed in Madison County. The plaintiffs attorneys will tout the lack of trials as proof that there is little abuse in the Madison County courthouse, but that perspective would diminish the value of the 99.9 percent of asbestos cases that settle and the mountains of cash made by the plaintiffs firms in the process. A December 2007 Mealey s Litigation Report article on asbestos by Bates & Mullin estimated that the average settlement of a mesothelioma claim in the United States is between $1 million and $1.4 million. In a January 2012 Legal Newsline article, several lawyers familiar with Madison County s asbestos docket [estimated] mesothelioma settlements range from $1.5 million to $5 million per case. If one were to assume that Madison County asbestos cases settle at an average conglomerated payout of $2 million per case, the amount of money transferred by the Madison County asbestos docket in the past 10 years and 8,688 cases is approximately $17.4 billion. With an annual transfer rate of approximately $1.74 billion, the Madison County asbestos docket is larger than the annual gross domestic product of Belize. With the generous system of a one-third contingent fee within the State of Illinois, asbestos trial lawyers could have reaped almost $600 million annually from the docket.
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