LANSING, Mich. (Michigan News Source) – Every year, the American Tort Reform Foundation (ATRF) graces us with the “Judicial Hellholes” report where they rank the nation’s courts by their ability to make business owners and legal scholars cringe. Tort reform refers to changes in the civil justice system that aim to reduce the ability to file lawsuits or limit the damages that can be recovered in lawsuits.

This year, Michigan’s Supreme Court clinched the #8 spot as a judicial hellhole. For those unfamiliar, this report highlights jurisdictions where judges appear to take innovative liberties with the law, usually at the expense of defendants.

Criteria for the dishonor.

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In their description of the report, the ATRF says, “Since 2002, the American Tort Reform Foundation’s (ATRF) Judicial Hellholes program has identified and documented places where judges in civil cases systematically apply laws and court procedures in an unfair and unbalanced manner, generally to the disadvantage of defendants.” They add about the courts, “Some are known for allowing innovative lawsuits to proceed or for welcoming litigation tourism, and in all of them state leadership seems eager to expand civil liability at every given opportunity.”

Why Michigan made the cut.

What earned Michigan the dubious distinction of being #8 in the report? A penchant for expanding liability and embracing junk science in courtrooms didn’t hurt. According to the ATRF, the Michigan Supreme Court has taken innovative approaches to premises liability cases (property-related injury claims) and employer lawsuits. Translation? Businesses and individuals alike are left nervously wondering if they’re one slip-and-fall away from financial ruin.

The Michigan court has also made headlines with its creative interpretations. The Michigan Supreme Court, in Stegall v. Resource Technology Corp., opened the door for employees to sue for wrongful termination under a “public-policy cause of action,” even when workplace safety laws already provide retaliation protections. In this case, an auto plant worker claimed he was fired after raising asbestos concerns, but Michigan OSHA found no asbestos at the site. Lower courts ruled the worker had to follow existing workplace safety law remedies, but the Supreme Court disagreed, saying those remedies were inadequate. A dissenting justice criticized the decision, arguing it bypassed legislative intent and pointed out the employer’s legitimate reason for the termination – the plant’s closure.

While it’s admirable to protect workers, critics say these decisions come at a cost – namely, an unpredictable legal environment where businesses hesitate to invest or expand.

A brief look at the winners and losers.

The big winners? Trial lawyers, who likely consider Michigan a jackpot jurisdiction for liability cases. The big losers? Small businesses, taxpayers, and anyone who thought Michigan was a friendly place for economic growth.

While Michigan’s legal escapades may thrill plaintiffs’ attorneys, they burden everyone else. Lawsuit abuse, as noted in the ATRF report, drives up insurance premiums, raises the cost of goods and services, and ultimately siphons money from local economies. In fact, the report says that Michiganders shoulder a $1,046 yearly “tort tax,” with excessive tort costs wiping out over 97,000 jobs annually according to a recent study by The Perryman Group.

Reaction and cases cited.

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NFIB (National Federation of Independent Business) Michigan State Director Amanda Fisher released the following statement in response to the report, “Michigan used to be a shining example of tort reform, but sadly that is no more. It’s no surprise that the Michigan Supreme Court has earned the title of ‘judicial hellhole’ this year after the disastrous rulings issued this term, especially those affecting the small business community.”

The NFIB is a nonprofit, nonpartisan member-driven organization that advocates on behalf of America’s small and independent business owners in Washington D.C. and in all 50 state capitals.

Fisher continued in her statement, “Unfortunately, the Courts now act as judicial activists, as the Michigan Supreme Court displayed this year with its ruling on Mothering Justice, et al v. the State of Michigan (Adopt and Amend) which essentially invalidated the legislature’s constitutional authority and has sent small businesses reeling with the burden placed on them regarding the Earned Sick Time Act and Minimum Wage.”

She added, “The Michigan Supreme Court also essentially invalidated the Administrative Procedure Act (APA) in Michigan Farm Bureau v. Department of Environment, Great Lakes, and Energy, giving state departments the ability to go around the APA in order to pass burdensome regulations on small businesses with no oversight or transparency. These are two of many decisions that are impacting small businesses. It is crucial that we work toward electing ‘rule of law’ judges and enact meaningful reform to help protect small businesses from lawsuit abuse.”

Another case that secures Michigan’s spot as a judicial hellhole.

The Michigan Supreme Court appeared in the ATRF’s report for the first time last year but they say the state is ready to be a “mainstay” citing the case of Danhoff vs. Fahim, where “the Court held that “scientific literature is not always required to support an expert’s standard-of-care opinion, but that scientific literature is one of the factors that a trial court should consider…” The Michigan Supreme Court found that the absence of published literature supporting the expert’s position did not preclude the expert’s testimony.

Who else is on the losers list?

The seven judicial “hellholes” that make the list ahead of Michigan include: the Philadelphia Court of Common Pleas & the Supreme Court of Pennsylvania; New York City; South Carolina Asbestos Litigation; Georgia; California; Cook County, Illinois; and St. Louis, Missouri. Rounding out the top 10 is number #9 King County, Washington and number #10 Louisiana.

Can the system be fixed?

What’s the solution? ATRF suggests judicial restraint and legislative reform to counterbalance the courtroom creativity. Whether Michigan leaders heed this advice remains to be seen. For now, the Wolverine State’s judiciary can bask in its top-ten glory – though perhaps they’d prefer a different kind of accolade.