Judicial Reform

Oklahoma added to ‘judicial hellhole’ top-10 list

July 29, 2019

Ray Carter

The American Tort Reform Foundation (ATRF) has announced it now ranks Oklahoma among the nation’s 10 worst “judicial hellholes,” a jarring reversal after several years of progress. Among the factors cited for changing Oklahoma’s ranking were several Oklahoma Supreme Court rulings and the state attorney general’s expansive use of “public nuisance” law to sue businesses.

Some officials say the report shows the need for significant reform in Oklahoma, including potential overhaul of the state’s judicial selection system, but Attorney General Mike Hunter has suggested the report is a product of opioid manufacturers.

“Once a national leader in enacting fair and balanced civil justice reform for plaintiffs and defendants, Oklahoma, regrettably, has become a place where pervasive liability expansion threatens to destabilize the economy,” the foundation said.

The actions of the Oklahoma Supreme Court were cited as a significant factor in changing Oklahoma’s rank.

“Throughout the first half of 2019, the Oklahoma Supreme Court significantly diminished the role of the legislature with regard to civil justice policy by handing down activist opinions that either strike down existing laws or interpret them with a complete disregard for their plain meaning,” the foundation stated.

Among several court decisions highlighted was one striking down a law that capped noneconomic damages at $350,000. That law did not cap recovery for actual damages, such as medical expenses and lost wages. The law also included an exemption for cases involving gross negligence, reckless disregard, intentional actions, or malicious conduct.

Even so, the Oklahoma Supreme Court ruled the cap was an unconstitutional “special law” and struck it down.

“In doing so, the court became an outlier, as a majority of courts, both state and federal, have found these statutory limits to be constitutional,” the ATRF said.

Oklahoma officials have long tracked the state’s ranking in the “judicial hellhole” report and cited it as justification for enacting lawsuit reform. The report’s latest change did not go unnoticed.

Fred Morgan, president and CEO of The State Chamber of Oklahoma, said Oklahoma Supreme Court rulings have invited the “judicial hellhole” label and show the need for reforming how judges are appointed.

“From the perspective of the business community, this label comes as no surprise when we remember our state’s highest court overturned major legislative victories such as caps on non-economic damages and real tort reform,” Morgan said. “Plus, let’s not forget the attempts to slowly chip away at major workers’ compensation reforms, thereby increasing liability for businesses and workers’ compensation insurers.

“But perhaps at the core of the ‘hellhole’ label is the inherent conflict of interest in Oklahoma’s broken Judicial Nominating Commission (JNC),” Morgan continued. “The JNC was supposed to create an unbiased way to select fair justices. Instead, it’s created an increasingly activist judiciary—usurping the role of the Legislature, striking down laws they don’t like, and overusing the special law and single-subject provisions of the state Constitution to fit their own personal biases.

“If we want to crawl out of the ‘judicial hellhole’ and grow our economy by protecting and attracting businesses, lawmakers should prioritize reforming our legal system next session,” Morgan concluded.

“If we want to crawl out of the ‘judicial hellhole’ and grow our economy by protecting and attracting businesses, lawmakers should prioritize reforming our legal system next session.” —Fred Morgan, president and CEO of The State Chamber

Under current law, the JNC reviews judicial applicants and submits three names to the governor when a judicial vacancy arises. The governor is not allowed to consider any other judges for those positions.

The process has long been criticized, particularly given the active participation of the state bar association in the JNC, which critics say has resulted in the appointment of judges favorable to trial lawyers.

Other business officials stressed the need to restore the cap on noneconomic damages next year. Jerrod Shouse, state director of NFIB/Oklahoma, said the loss of the cap is a major issue for small businesses.

“The courts have already been chipping away at some of the recent hard-fought workers’ compensation reforms. And now they have eliminated the cap on non-economic damages. So small businesses have real reason to be concerned—not just because of these recent rulings, but because of the uncertainty of what could be next,” Shouse said.

“Think about the average small businesses—they don’t have deep pockets or a team of lawyers on staff,” he continued. “Without reasonable caps on punitive damages, a small business could be destroyed by a lawsuit, or forced to settle out of court under the threat of outrageous punitive damages.

“So we’ll be working closely with the Legislature over the interim and next session to address these issues, and make sure that small businesses regain some protection,” Shouse concluded.

In declaring Oklahoma a “judicial hellhole,” the ATRF also cited Attorney General Mike Hunter’s reliance on “an overly expansive view of the state’s ‘public nuisance’ law” to sue opioid manufacturers.

“Manufacturers of all products would view a victory for the state in this case with great concern as its applicability likely would grow as states look for additional sources of funding for public health problems,” the ATRF said. “By this logic, cell phone manufacturers could be held liable for harm caused by distracted drivers. Similarly, auto-manufacturers might be held liable for accidents caused by drunk drivers. If allowed to stand, this case certainly opens the door to those possibilities.”

If Hunter’s opioid lawsuit is successful, the ATRF says that would leave Oklahoma law “well outside of the legal mainstream,” noting a North Dakota judge rejected a similar argument pursued against Purdue Pharma this year.

In that case, the judge wrote, “No North Dakota court has extended the public nuisance statutes to cases involving the sale of goods.”

The judge bluntly concluded, “The reality is that Purdue has no control over its product after it is sold to distributors, then to pharmacies, and then prescribed to consumers, i.e., after it enters the market. Purdue cannot control how doctors prescribe its products and it certainly cannot control how individual patients use and respond to its products, regardless of any warning or instruction Purdue may give.”

The foundation noted attorneys general in other states have cited similar “public nuisance” theories to pursue lawsuits targeting oil-and-gas producers for causing climate change. (Hunter has opposed those lawsuits.)

The American Tort Reform Foundation added Oklahoma to its “judicial hellhole” list while hearings in Oklahoma’s opioid trial were ongoing, and Hunter dismissed the report as “legal doomsday hysteria” in his closing arguments. He even went so far as to suggest Johnson & Johnson, the company targeted by the state opioid lawsuit, was responsible for the “judicial hellhole” ranking.

“Oklahoma has become a place where pervasive liability expansion threatens to destabilize the economy. —American Tort Reform Foundation

“If you have any doubt at all that J&J is behind this attack on me and the Supreme Court of Oklahoma, all you have to do is look at the job posting I found this weekend—outlining that one of the jobs a J&J attorney must do is to work in conjunction with the American Tort Reform Association,” Hunter said.

The “judicial hellhole” report has been produced annually since 2002. Other entities have also raised similar concerns about Oklahoma’s use of “public nuisance” arguments to target manufacturers.

Lisa A. Rickard, president of the U.S. Chamber Institute for Legal Reform, has warned that Oklahoma’s opioid lawsuit “not only threatens to upset the rule of law but could backfire badly on the Oklahoma economy.”

“If Oklahoma wins, the ramifications won’t stop with the pharmaceutical industry,” Rickard wrote. “Government officials and their hired-gun private lawyers will use the same weapon against any other business they think imposes costs on the public at large, including Oklahoma’s energy industry.”

In a written statement, Alex Gerszewski, communications director for Oklahoma Attorney General Mike Hunter, dismissed any comparison of opioid and climate-change lawsuits or comparisons to other manufacturers.

“It’s absurd to compare the theory of public nuisance with other manufacturing sectors, such as car makers or gun makers to abating the opioid epidemic,” Gerszewski said. “The opioid epidemic is the worst manmade public health crisis our nation has ever experienced and is claiming thousands of lives every year. The opioid epidemic can be curtailed through a discernible and focused series of actions, including education, prevention, treatment, and enjoining deceptive marketing practices.”

In comparison, Gerszewski said an issue like climate change “is a hypothetical global phenomenon with countless factors and influences, such that attempted abatement via a judicial order of a state judge is totally inapplicable.”

Gerszewski also noted that every state in the country except Nebraska has filed lawsuits targeting opioid manufacturers.