Fairhope Alabama Personal Injury accident Attorney at Law James Dorgan

Alabama No. 1 ... in jury verdicts

American Tort Reform group places state in worst category of 'Judicial Hellholes'

By Phillip Rawls
Associated Press Writer

MONTGOMERY - After much work to shed the image of "tort hell," Alabama is back in the national legal spotlight because the state had the largest jury verdicts in the country for two consecutive years.

A new report from the American Tort Reform Association puts eastern Alabama on its list of areas to watch. That's the lowest of the three categories in the business group's annual ranking of "Judicial Hellholes."

Neither the whole state nor any part of the state has made the association's list since 2002, when the state was in the association's middle category called "dishonorable mention."

"It's my opinion we should never have been off the list," said Skip Tucker, executive director of Alabama Voters Against Lawsuit Abuse.

He said the new listing "returns the national spotlight to our out-of-whack court system that is happy host to so much lawsuit abuse."

Scott Powell, president of the Alabama Trial Lawyers Association, said the tort reform group's report conflicts with numerous accounts about Alabama having a strong business climate. For instance, Site Selection magazine's latest annual ranking of the most competitive states in industrial recruitment put Alabama in first place.

Powell said the Alabama Tort Reform Association's report is really aimed at next year's elections for the state Supreme Court. "It's an effort by the Tort Reform Association to influence the justices," he said.

Founded in 1986

The American Tort Reform Association is a business group founded by the American Medical Association and the American Consulting Engineers Counsel in 1986. Its members now include a wide variety of businesses, including Anheuser Busch, Johnson & Johnson, New York Life Insurance and Pfizer. Like Alabama Voters Against Lawsuit Abuse, it seeks to restrict big jury verdicts.

Alabama became the target of such groups in the 1980s and '90s because of several headline-grabbing verdicts. Alabama soon got labeled "tort hell" by groups seeking to put limits on the punitive damages that juries could award, and Alabama voters saw political ads loaded with phrases like "tort reform" and "lawsuit abuse."

The Legislature reacted with several new laws, including one in 1999 to limit punitive damages to three times the compensatory damages in most cases. As those laws kicked in, Alabama's reputation began to change.

Gretchen Schaefer, spokeswoman for the American Tort Reform Association, said if groups like hers take the focus off a state, old habits tend to return.

The association's new report said, "Alabama has the distinction of hosting the nation's highest verdicts in both 2003 and 2004." It categorized both of the verdicts as being in eastern Alabama.

In 2003, a Montgomery County jury returned an $11.9 billion verdict in the state government's lawsuit accusing Exxon Mobil of deliberately underpaying royalties to the state for natural gas wells drilled in state-owned waters along the Alabama coast. That case is on appeal to the Alabama Supreme Court.

In 2004, a jury in Macon County awarded $1.6 billion in punitive damages and $20 million in compensatory damages to a woman who paid $50 per month for a nonexistent life insurance policy for nearly five years.

After the verdict, Texas-based Southwestern Life Insurance Co. and the woman's lawyers reached an out-of-court settlement that they agreed not to disclose.

Alabama also had the nation's No. 2 jury verdict in 2004, according to VerdictSearch, a group that tracks big jury awards.

A federal court jury in Montgomery returned a $1.3 billion verdict for cattle producers who accused Tyson Fresh Meats of illegally manipulating cattle prices. A judge threw out the verdict.

Tucker said that even if big verdicts are thrown out or settled for much less, companies still run up enormous expenses defending themselves in Alabama courts.

Brian Strength, one of the attorneys who won the Macon County case, said big verdicts can cause needed changes to protect consumers.

The Macon County case resulted in new cash management policies for insurance agents who collect premiums from customers.

"When the jury sees the need to change something, they do it with the verdict," he said.

Robert Cunningham, one of the state's attorneys in the lawsuit against Exxon Mobil, called the association's report biased because it makes no mention of a $400 million verdict that Exxon Mobil won in Delaware in a suit against a Saudi corporation.

"When one of its big corporate supporters like Exxon is doing the suing and wins, the ATRA has no criticism of the location," Cunningham said.