Total State Verdicts: $8,960,895,111
Total Federal Verdicts: $1,206,024,565
Top Sub-Industries: Pharmaceuticals, Technology, Electric Utilities, Health Care Equipment, Aerospace & Defense
97% of Corporate Nuclear Verdicts in State Courts Ordered in Philadelphia’s Court of Common Pleas
Court of Common Pleas’ Complex Litigation Center Attracts Mass Tort & Large Verdict Cases
Philadelphia Employs Unusual Procedures That Increase Liability Verdicts & Compensatory Damages
Application of Pennsylvania Venue Rule Allows Cases With Limited Connection to Philadelphia to Thrive
August 2022 Pennsylvania State Supreme Court Ruling Likely to Increase Venue-Shopping in Medical Matters
Legal Services Ads in Pennsylvania Increased 40% From 2016 to 2020
Unfavorable Litigation Finance Jurisdiction
Marathon’s analysis found that the Philadelphia Court of Common Pleas ranked second among state court venues in corporate nuclear verdicts, with $8.7 billion ordered against companies since 2009. Philadelphia accounted for 98% of all corporate nuclear verdicts in Pennsylvania, with the remaining 3% spread across the state.
Only two corporate nuclear verdicts were ordered in Pennsylvania federal courts, with its total almost entirely driven by a $1.17 billion verdict in Carnegie Mellon University v. Marvell Technology Group (2012), an intellectual property case filed in the state’s Western District. The $7.7 billion gulf between state and federal verdicts in Pennsylvania was driven by one case, an $8 billion product liability verdict in Murray v. Janssen Pharmaceuticals (2019) in the Philadelphia Court of Common Pleas.
According to an International Center for Law & Economics study, the Court of Common Pleas – when measured against other Pennsylvania state and federal district courts – hosts an especially large number of cases, has a larger docket than expected, hosts plaintiffs less likely to settle than other non-Philadelphia court plaintiffs, and hosts plaintiffs disproportionately likely to prefer jury trials.
Philadelphia Court of Common Pleas’ ‘Open Door’ Policy
According to the ATR Foundation, the Court of Common Pleas is infamous for having an “open door” policy for out-of-state plaintiffs seeking a more favorable trial venue. This is due to judges’ liberal application of Pennsylvania’s venue rule (231 Pa. Code § 2179), which allows plaintiffs to bring an action against a corporation in “a county where it regularly conducts business,” through a “quality-quantity analysis,” even if there is limited connection to Philadelphia County. In a notable March 2021 decision, the Pennsylvania Superior Court determined that venue in Philadelphia County was proper in a case against Husqvarna Professional Products, despite local sales there accounting for .005% of its $1.4 billion national sales.
Philadelphia’s litigation environment is also bolstered by the Complex Litigation Center, which specializes in mass torts and other large-verdict cases and has often been cited as a national model for mass torts litigation. The Complex Litigation Center oversees cases regarding asbestos, pharmaceuticals, medical devices, and similar cases, attracting class action matters with minimal connection to Philadelphia County. Judges from the Center have also previously indicated intent to attract litigation from other courts in the state: in 2009, Common Pleas President Judge Pamela Pryor Dembe made numerous calls to make Philadelphia’s mass torts program more attractive to the mass torts bar. The data indicate this unusually public campaign has been successful.
Philadelphia courts also employ several atypical plaintiff-friendly procedures that lead to disproportionately large shares of litigation and verdicts relative to both Pennsylvania and federal courts. Philadelphia has notable permissive procedures, including a “reverse bifurcation” trial, in which damages from alleged harm are calculated prior to establishing liability. In a typical bifurcated trial, the burden is on the plaintiff to establish liability before proving damages.
One study has indicated reverse bifurcation resulted in a 29% increase in liability verdicts and more than a $600,000 increase in compensatory damages. Pennsylvania state courts also employ other plaintiff-friendly procedural devices, including lenient standards for expert testimony.
In Murray v. Janssen Pharmaceuticals, the plaintiff Nicholas Murray originally sued the drug company in Maryland in 2013, alleging he developed gynecomastia after using the company’s Risperdal product to treat his autism. In March 2016, a jury awarded him $1.75 million in compensatory damages, which was later pared down to $680,000 due to Maryland’s cap on non-economic damages.
When Murray brought the case to Philadelphia County, the courts had some 7,000 Risperdal cases pending, with a judge initially barring punitive damages because of a global order in a mass tort program established to coordinate all of the cases. After the order was overturned in 2018, Murray v. Janssen Pharmaceuticals became the first case in which a jury was allowed to consider punitive damages awards against the company. The $8 billion verdict was ordered in October 2019. In January 2020, Judge Kenneth Powell of the Court of Common Pleas slashed the payout to $6.8 million.
In addition to thousands of pending Risperdal cases, Philadelphia County ranks among the top four most popular jurisdictions for asbestos litigation. 209 such cases were filed in 2020, with over 600 pending through November 2021. The volume of cases soared following a Pennsylvania Supreme Court decision in Roverano v. John Crane Inc. in February 2020, which addressed a jury’s apportionment of liability on a percentage basis in strict liability asbestos cases as well as the inclusion of bankrupt entities on a verdict sheet. The US Chamber of Commerce and a coalition of business groups had filed an amicus brief in the case urging the state Supreme Court to require trial courts to apportion liability on a percentage, rather than per capita basis. The holding in Roverano makes clear that defendants found liable in strict product liability cases will pay an equal share of a damage award, even if they have minimal liability.
Nuclear verdicts arising from consumer class action cases in Philadelphia County and Pennsylvania are expected to rise. In August 2022, Pennsylvania’s Supreme Court reversed a two-decade-old rule aimed at preventing doctors from leaving the state because of high medical malpractice insurance costs. The ruling allowed plaintiffs to resume filing medical malpractice cases in any county in the state, rather than restricting them to the county where the alleged incident occurred. Critics have argued this ruling will cause a deluge of venue-shopping.
Legal Services Advertising
According to the ATR Foundation and Kantar, between 2016 and 2020, spending on local advertisements for legal services and/or soliciting legal claims in Pennsylvania increased by 17.5% while the quantity of ads increased by 40.66%.
Litigation Finance-Unfavorable Jurisdiction
Despite its plaintiff-friendly environment, Pennsylvania has been identified by the American Transport Research Institute as among the five least attractive states for investing in litigation. This is due to the high risk that a litigation financing agreement would be invalidated under state law, and a low risk that such an agreement would be subject to usury law. Pennsylvania does not directly regulate litigation finance by statute, but it does recognize the doctrine of champerty, which has been applied to invalidate litigation financing agreements.
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Corporate Verdicts Go Thermonuclear
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